Officials said both aircraft were hit by fire and one crashed into the tax office building near the air force headquarters and exploded, while the second was shot down near the same base north of Colombo.
Four people died in the attack, including the two pilots, and 51 people were injured.
David Hawkins, Al Jazeera's correspondent in Sri Lanka, said: "It was a very embarrassing attack on the nation's capital, that two planes were able to cross most of the island without being intercepted along the way."
He said the military confirmed it was aware that the LTTE aircraft had taken off, but was unable to locate them before they reached Colombo "because they flew so low and so slowly".
The Sri Lankan government has stepped up its air defences, with police and military officials saying they expect more LTTE attacks as the group appears to be steadily losing territory to advancing government forces in the north.
"This particular air raid has not come as a big surprise," Murali Reddy, a Sri Lankan journalist, told Al Jazeera.
"The surprise element is only that the government, or the military, was not able to intercept these two aircraft between the north and the capital, but everybody was expecting some kind of action from the Tigers as they cling on to their last bastion in Mullaitivu."
The government says it has the Tigers confined in an area of less than 100sq km along a coastal jungle stretch in the northeast.
But the Tiger's defiant air attack showed the fighters retain the ability to launch raids across the country, even while their ground forces are under attack.
Reports of high civilian casualties in the conflict have prompted criticisms from human rights groups and the UN.
Human Rights Watch has said that up to 2,000 non-combatants have been killed and has accused both sides of war crimes, calling on them to immediately stop "the ongoing slaughter of civilians".
The UN also said that it was deeply concerned for thousands of people trapped in the island's northeast.
Al Jazeera also received footage from a pro-Tamil group that said it showed Sri Lankan government forces bombing a civilian safe zone.
The group claimed the images, which showed dead bodies and distraught people, were scenes of the aftermath of a government raid in the country's northeast.
The group's claim could not be independently verified.
Government officials have told Al Jazeera that they stopped carrying out air attacks one week ago in order to protect civilians.
Speaking at the end of a three-day visit to Sri Lanka on Saturday, John Holmes, the UN humanitarian chief, expressed concern about the heavy military presence at refugee camps set up for the more than 30,000 civilians who have fled the war zone.
"I fear the reality is that significant numbers of people are still killed and injured every day in that pocket," he said.
The LTTE is fighting for a separate Tamil homeland in Sri Lanka's north, claiming Tamils have suffered years of discrimination by the country's Sinhalese majority.
More than 70,000 people have been killed in the fighting since Sri Lanka's civil war began in 1983.