JVP leader Somawansa Amarasinghe told a press conference that since the deadline of June 15 passed and its request of giving up the joint mechanism was not accepted by President Chandrika Kumaratunga, it decided to leave the government.
Somawanasa Amerasinghe, the JVP leader said, "We now announce our leaving the United People's Freedom Alliance with a sense of deep regret of work unfulfilled."
He also said that, after leaving the government they would look to form other alliances with other parties as their concerns raised with Kumaratunga had "fallen on deaf ears and autocratic eyes."
The JVP's decision to quit the government has plunged the country into a period of political uncertainty.
The JVP controlled 39 seats in the government strength of 120 seats but the main opposition United National Party has said that they were not interested in making political capital out of the situation.
"We have made it clear that we will not make use of this crisis to bring the government down," a spokesman from opposition United National Party told reporter here.
After the split, the party represents the largest single group in the assembly with 88 legislators, he added.
"Quite to the contrary, we want the president to establish the 'joint mechanism' as quickly as possible," the spokesman said.
Meanwhile, Amarasinhe said he did not rule out the possibility of JVP returning to the alliance but said they were yet to hear from the "other party".
Later in the day, the four JVP ministers and their deputies rendered their resignations to the Sri Lankan government.
Earlier in the morning, the state radio announced Sri Lanka's controversial joint deal with the Tamil Tigers for tsunami relief co-ordination is to be presented in the country's legislature.
At the same time, international donors on June 14 who pledged three billion dollars in aid to rebuild Sri Lanka's tsunami-hit coastal areas have asked the government and the rebels to set up the joint mechanism to ensure the equitable distribution of relief.
The JVP gave a deadline of June 15 to Kumaratunga to give up her plan to implement a joint mechanism with the Tigers, and they dubbed the mechanism as one which would confer legitimacy to a terrorist group.