Earlier demanding ouster of Lankan players from the IPL matches to be held in Chennai, Jayalalithaa wrote a letter addressing prime minister Manmohan Singh.
In her letter Jayalalithaa said, "In view of the popular antipathy and anger in Tamil Nadu against the actions of the Government of Sri Lanka, the Government of Tamil Nadu is of the view that IPL matches involving Sri Lankan players, umpires and other officials should not be played in Tamil Nadu."
"The Government of Tamil Nadu will permit IPL matches to be held in Tamil Nadu only if the organizers provide an undertaking that no Sri Lankan players, umpires, officials or support staff would participate in these matches", she added.
The recent continuous agitations in Tamil Nadu during the debate in the UNHRC have revealed the "great angst and anguish" among the people with regard to the highly emotive Sri Lankan Tamils issue.
"In this surcharged atmosphere, the IPL cricket tournament is scheduled to be held at various locations, including Chennai from April 3 onwards and will go on for over a month till May 26", she said, noting that almost all participating teams have in their ranks Sri Lankan cricketers as their team members.
Observing that the civil strife in Sri Lanka was a "lamentable saga of an ethnic pogrom" launched by the Lankan government against Tamils, she said, "These painful events of genocide of innocent Sri Lankan Tamils have had a deep impact amongst the people of Tamil Nadu...".
"Recently, against the background of increasing and credible evidence of continuing atrocities against Sri Lankan Tamils, Tamil Nadu witnessed mass agitations, hunger strikes, self-immolations and large-scale spontaneous involvement of many sections of society, including the student community, protesting against the Sri Lankan action against the Tamils", she said.
Recalling her letter to him on the attack on Tamil Nadu fishermen allegedly by the Sri Lankan Navy, she said, "Understandably, their sentiments, too, have been hurt by these brutal and hostile acts of the Sri Lankan Navy".
"All political parties in Tamil Nadu have repeatedly voiced their grave concern regarding these issues. The atmosphere is, therefore, already surcharged with a groundswell of popular public opinion against the Sri Lankan Government", she said.
"In such a hostile and tense environment, we apprehend that the participation of Sri Lankan players in the IPL tournament, with many games to be played in Chennai, will aggravate an already surcharged atmosphere and further offend the sentiments of the people", Jayalalithaa said.
Amid protests over the alleged brutal killing of slain LTTE chief V Prabhakaran's son, she had last month said that her government would not host the 20th Asian Athletics Championships here in July, saying that Lankan players have no place in the state.
In September last year, Jayalalithaa had sent back a Lankan football team home and suspended a state official for allowing them to play a friendly match here.
Tuesday's decision on IPL matches comes close on the heels of attack on Sri Lankan Buddhist monks in the state, allegedly by pro-Tamil activists.
(With PTI inputs)