The tea production has risen 13.1 percent this year over last year's output to hit a record high in 2010.
According to Sri Lanka Tea Board statistics, the tea output grew by 13.1 percent to 329.38 million kilograms from 291.13 million in 2009.
The authorities attribute the yield to the favorable weather the tea country experienced last year.
However for the last month the production fell by 2.4 percent to 25.69 million kilograms as rains lashed Sri Lanka's central hills during the latter half of December 2010.
The major portion of Sri Lanka's production, Orthodox black tea, grew 12.7 percent to 307.76 million while CTC production had increased by 15.75 percent to 18.33.
A significant increase of 42.4 percent was noted in Green Tea output which grew from 2.31 million kilograms in 2009 to 3.28 million kilograms in 2010.
The Central Bank in its external performance review on Friday noted that during the first 11 months of 2010, tea exports brought in US$ 1.246 billion contributing to 67.4 percent of total income from agricultural exports.
Today Sri Lanka is the world's fourth largest producer of tea and the industry is one of the country's main sources of foreign exchange and a significant source of income.
The humidity, cool temperatures, and rainfall in the country's central highlands provide a climate that favors the production of high quality tea. The industry was introduced to the country in 1867 by James Taylor, the British planter who arrived in 1852.
In Budget 2011 the government announced measures to increase support to the tea industry with incentives for value addition in tea production and also a subsidy.