"The series will go on," Sri Lanka Cricket (SLC) chief executive Duleep Mendis told AFP on Monday after a meeting with officials of the Indian and South African teams.
"We will continue to monitor developments but the matches will be played as scheduled. The security for the teams has been increased."
The blast on Monday afternoon in the same area where the teams' hotels are located appeared to target Pakistan's High Commissioner (ambassador) to Sri Lanka Bashir Wali Mohamed.
The ambassador was driving through the area when the blast occurred, police said, adding that a Sri Lankan military vehicle escorting him was hit by the explosion.
However, four commandos guarding the diplomat were killed instantly, police said adding that the other three victims were bystanders. Eight others were wounded and taken to hospital.
It was the first time in 21 years that a foreigner had been targeted in an attack in Sri Lanka's three-decades-old separatist campaign after the kidnapping of an American couple in 1985 by Tamil militants.
The attack came four days after a powerful car bomb attack on a government Tamil politician in Colombo. The politician escaped but his bodyguard and two bystanders were killed.
Sri Lankan cricket officials went into a huddle soon after the opening match between South Africa and Sri Lanka was washed out due to heavy rain.
The match will be played on Tuesday, weather permitting, as a reserve day has been kept aside for all seven matches of the series that runs till August 29.
Indian team official Rajan Nair said the entire team was safe and confined to the cricketers' heavily-guarded hotel.
"There is nothing to worry," Nair told AFP. "The boys were in their rooms when the blast took place and did not even know that something had happened.
"We were due to leave for a practice session but it was cancelled because of the rain."
New Zealand abandoned their cricket tour of Sri Lanka in 1987 after a blast in Colombo's Pettah region, which houses the main bus and train stations, killed 110 civilians and two policemen.
The New Zealanders suffered another shock in 1992 when a blast outside their team hotel in Colombo killed the country's Naval chief Clancy Fernando. They, however, went ahead and played two Test matches and three one-dayers.