"He was killed with two others inside the vehicle. There will be a formal announcement later," the official said on condition he not be named.
"When the troops opened fire, the van tried to get away, but it was also hit," said another high-level source from the military. "The vehicle caught fire."
The defence ministry said the rebels´ leadership was decimated, heralding an end to their decades-old battle to carve out an independent ethnic homeland in the north of the island.
Troops also found the bodies of Prabhakaran´s 24-year-old son Charles Anthony, the group´s political wing leader B. Nadesan, and the head of the Liberation Tigers of Tamil Eelam (LTTE) Peace Secretariat, S. Pulideevan.
Also reportedly found dead were the LTTE´s police chief Ilango, its eastern leader, S. Ramesh, and deputy intelligence chief Kapil Amman.
In a dramatic announcement, the guerrillas acknowledged Sunday that their decades-old battle for an independent ethnic homeland had reached its "bitter end" -- signalling Asia´s longest running civil war was all but over.
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.
"We have decided to silence our guns. Our only regrets are for the lives lost and that we could not hold out for longer," Selvarasa Pathmanathan, the Tigers´ chief of international relations, said in a statement.
But his appeals for peace talks -- rather than a surrender -- were flatly rejected by the government, and the defence ministry said soldiers were being sent in to crush the diehard remnants and recapture "every inch of land."
Sri Lanka´s hawkish president, Mahinda Rajapakse, will open a new session of parliament Tuesday with an address that will officially mark the ending of the war.
The conflict has left more than 70,000 dead from pitched battles, suicide attacks, bomb strikes and assassinations. The LTTE emerged in the 1970s, with all-out war breaking out in the early 1980s.
The capital Colombo, which has been frequently hit by Tiger suicide attacks over the past quarter century, saw street celebrations which lasted well into Sunday night.
Authorities have been determined to capture, kill or recover Prabhakaran´s body amid fears his escape may lead to an attempt to rebuild the LTTE and usher in a new cycle of violence.
The Sri Lankan government´s moment of triumph has also come at the cost of thousands of innocent lives lost in indiscriminate shelling, according to the United Nations. The UN´s rights body now wants a war crimes probe.
The International Committee of the Red Cross, the only neutral organisation that has been allowed to work in the war zone, has for its part described "an unimaginable humanitarian catastrophe."
But Sri Lanka has shrugged off the international pressure.
"There was no bloodbath as some people feared," Human Rights Minister Mahinda Samarasinghe told reporters. "Everybody has come out safely and they are being looked after by the government."
Human-Tiger Coexistence Amidst Rising Tiger Population
Key dates of Sri Lanka´s civil war
1972: Armed with just a revolver, Velupillai Prabhakaran forms a Tamil militant group, which eventually morphs into the Liberation Tigers of Tamil Eelam (LTTE).
July 23, 1983: LTTE ambushes an army patrol, killing 13 soldiers in the Jaffna peninsula and sparking anti-Tamil riots elsewhere that leave about 600 people dead.
July 8, 1985: Sri Lanka opens first direct talks with Tamil guerrillas. They fail.
July 29, 1987: India and Sri Lanka reach agreement on deployment of Indian peace-keeping force.
March 24, 1990: India loses 1,200 troops at the hands of the LTTE, and withdraws to leave the Tigers in control of large swathes of northern Sri Lanka.
May 21, 1991: Former Indian premier Rajiv Gandhi killed, allegedly by an LTTE suicide bomber.
May 1, 1993: Sri Lankan President Ranasinghe Premadasa killed by LTTE suicide bomber.
December 2, 1995: The Sri Lankan army captures the Jaffna peninsula.
July 18, 1996: The Tigers overrun an army camp in the northeastern town of Mullaittivu, killing 1,200 troops.
October 8, 1997: The United States declares the LTTE a foreign terrorist organisation.
January 25, 1998: An LTTE suicide bomb devastates Sri Lanka´s holiest Buddhist shrine, the Temple of the Tooth, killing 17 people.
September 26, 1998: Tigers overrun Kilinochchi army camp, killing more than 1,000 government soldiers.
February 2001: Britain outlaws the LTTE as a terrorist organisation, followed swiftly by Canada and Australia.
July 2001: Suicide attack by Tamil Tigers on the international airport kills 14.
February 23, 2002: Government and Tamil Tiger rebels sign a Norwegian-brokered ceasefire agreement.
December 2002: At peace talks in Norway, the government and rebels agree to share power, with the minority Tamils enjoying autonomy in the mainly Tamil-speaking north and east.
March 3, 2004: Renegade Tamil Tiger commander, V. Muralitharan, known as Karuna, leads a damaging split from main rebel movement.
November 2, 2007: The head of the Tamil Tigers´ political wing, S.P. Thamilselvan, is killed in a government air raid.
January 2, 2008: Sri Lanka withdraws from the ceasefire agreement and steps up attacks against the Tigers.
January 2, 2009: Sri Lankan forces capture Kilinochchi, leaving the Tigers only the jungle district of Mullaittivu.
January 25, 2009: Sri Lankan troops capture Mullaittivu town, confining the rebels to a stretch of jungle.
February 3, 2009: The Sri Lankan army says it has captured an elaborate underground bunker complex believed to have been the home of the leader of the Tamil Tigers, as well as the rebels´ last jungle airstrip.
February 20, 2009: Tamil Tiger planes conduct suicide raids against the capital Colombo.
March 13, 2009: The United Nations´ human rights chief says both sides could be guilty of war crimes.
April 14, 2009: The Tamil Tigers say they are ready to negotiate a ceasefire and restart peace talks. The government refuses, telling them to surrender.
April 20, 2009: Tens of thousands of trapped civilians manage to flee from the shrinking area under rebel control.
May 13, 2009: The United Nations Security Council for the first time asks warring parties to spare civilians as the world body describes fighting in the last remaining patch of Tiger territory as a "bloodbath" for civilians.
May 16, 2009: Sri Lanka President Mahinda Rajapakse says the rebels have been defeated.
May 17, 2009: In an admission of defeat, the Tamil Tigers say their battle "has reached its bitter end" and that they have "decided to silence our guns."
May 18, 2009: A defense official said Tamil Tiger leader V Prabhakarn killed by troops.
