SRI Lanka's navy says it has seized a fishing trawler carrying at least 97 asylum seekers on their way to Australia.

The boatload of migrants belonging to Sri Lanka's Tamil minority was intercepted at Oluvil off the country's eastern coast on Wednesday, navy spokesman Commander Kosala Warnakulasuriya told AFP.

"In the arrested lot were 39 men, 18 women and also 40 children," Warnakulasuriya said.

They will be handed over to Sri Lankan police later in the day, he added.

Last year some 16,770 asylum seekers arrived on Australia's shores, with Sri Lankans the biggest group, numbering about 6360.

Hundreds have died making the treacherous journey over the past few years.

Canberra is struggling to contain the numbers and has set up processing centres on Nauru and Papua New Guinea.

Sri Lankans pay up to $US3000 ($A2800) for a place on trawlers that take around two weeks to make the treacherous crossing to Australia. Some migrants travel by air to Indonesia and then take rickety wooden vessels to the Australian coast.

On Monday two people including a young child died when an asylum-seeker boat capsized. More than 90 were plucked to safety and taken ashore.

Originally published as Sri Lanka holds Aust-bound asylum seekers