The 2004 Indian Ocean tsunami caused 230,000 fatalities and massive physical damage along the shorelines of the Indian Ocean. Holocene sedimentary archives along the coastline of Sri Lanka can provide evidence for similar past events. The objective of our current study is to investigate the sedimentological and geochemical characteristics of Sri Lankan paleo-tsunami deposits, and their chronology. Sediment samples were collected down to 10 m depth using core drilling at a sheltered site (low-lying swale depression) in Koddiyar Bay (Trincomalee) on the east coast of Sri Lanka. Visual stratigraphic observations and grain size analyses were carried out to identify lithological changes. Bulk sediments, shells, and wood fragments were used for 14C age dating. Seven sand layers were identified throughout the core in this marshy wetland. Sedimentological observations and geomorphological features show that sheltered/protected swales of the inner bay have a high potential for preservation of paleo-tsunami sediments. Three possible paleo-tsunami deposits were identified earlier than 700 years, ca. 2000 years, and ca. 2700 years. These paleo-tsunami sand layers exhibited relatively high total organic carbon (TOC) contents due to admixture of continental shelf and lagoon sediments. Analysis of paleo-tsunami records suggests that the Andaman Sea is vulnerable to both ‘low-risk and high-frequency’ and ‘high-risk and low-frequency’ type tsunamis, whereas other areas in the Indian Ocean are more prone to destructive and low-frequency type tsunamis. This study contributes to improving tsunami risk assessment and mitigation strategies along the east coast of Sri Lanka.