The army said its commandos overran the last sliver of Tiger territory, killing the last 300 fighters and decimating the rebel leadership. It said Prabhakaran and two deputies were shot dead trying to flee in a van and ambulance.

'We have successfully ended the war,' the island's powerful defence secretary, Gotabhaya Rajapakse, told the president on Monday in a nationally televised ceremony.

Army chief Lieutenant General Sarath Fonseka also declared an end to all combat operations.

'Prabhakaran's body is among the 300 terrorist bodies that we captured,' General Fonseka said on state television. '"Now the entire country is declared rid of terrorism.'

The statements marked the end of one of Asia's oldest and most brutal ethnic conflicts which left more than 70,000 dead from pitched battles, suicide attacks, bomb strikes and assassinations.

The Liberation Tigers of Tamil Eelam (LTTE) emerged in the 1970s, with all-out war breaking out in the early 1980s as they pursued their struggle for an independent Tamil homeland on the Sinhalese-majority island.

Officials said all rebel leaders were killed in a final showdown on a lagoon and jungle peninsula on the northeast coast.

The separatist rebels were once one of the world's most feared guerrilla armies, and ran a de facto mini-state spanning a third of the island before the government began a major offensive two years ago.

The capital Colombo, which has been frequently hit by Tiger suicide attacks over the past quarter century, witnessed massive street celebrations - with residents setting off firecrackers and waving flags.

'This is a victory against terrorism. I am very proud of our forces, of what they have done,' said Ashani de Silva, a Colombo student, as national flags were put up over shops, homes, offices and cars. -- AFP