A fire has now spread to the armoury of the camp.
People living near the camp are being evacuated.
Assisted by the Air Force, the Army is trying to put out the fire.
The ammunition storage had ammunition used for artillery and tanks.
The explosion could be heard for several kilometers.
The Colombo-Avissawella road has been closed between Kaluagalla and Avissawella.
Military spokesman Brig. Jayanath Jayaweera requests the public not to come to the area to see the incident.