Sri Lanka's army commander said government soldiers have captured the last major town held by Tamil Tiger separatists.
The eastern port of Mullaittivu is one of the final targets of a military onslaught to end a 25-year war with the Liberation Tigers of Tamil Eelam rebels.
The army had not set foot inside it since the Tamil Tigers seized it in 1996.
"After one month's fight we have totally liberated Mullaittivu town," Lieutenant General Sarath Fonseka said in an address on state television. "We will be able to finish this war soon."
The 59th Division has been battling up the eastern coast toward Mullaittivu for a year and a month ago reached the edge of the fortified town, which served as a major Tamil Tiger operations base.
The capture on Sunday leaves the rebels confined to a wedge of jungle in the northeast of the Indian Ocean island, with its remaining defences and bases scattered in a handful of villages.
The army has racked up a string of victories this month, including capturing the rebels' self-proclaimed capital of Kilinochchi and expelling them from the Jaffna Peninsula.
Aid agencies say about 230,000 civilians fleeing the fighting are trapped in the war zone. Rights groups and the government accuse the rebels of keeping them as human shields.
The Liberation Tigers of Tamil Eelam rebels began fighting in earnest in 1983. They say they are the sole representatives of the Tamil minority, which complains of mistreatment by successive governments led by the Sinhalese ethnic majority since independence from Britain in 1948.