Sri Lanka's north bore the brunt of the conflict in the 37-year-long Tamil separatist war, which was brought to a bloody conclusion in May 2009.
Many among the Tamil minority lost their land title deeds during the years of displacement, and the area was also hit by the 2004 Asian tsunami.
The Supreme Court order concerning nearly 6,000 acres (2,428 hectares) of land came a day after UN human rights chief Volker Turk ended a three-day visit, during which he urged the authorities to return private lands still occupied by troops.
The UN estimates that at least 100,000 people died in the war, and that 40,000 of them from the Tamil minority were killed by troops in the final months of the conflict.
Turk also asked Sri Lanka to investigate allegations of war crimes and punish the perpetrators.
Successive Sri Lankan governments have refused internationally-backed investigations, and there has been no credible local accountability mechanism.
Former Tamil legislator M.A. Sumanthiran, who petitioned the court, said it has stopped a land grab.
"The government promised three months ago not to go ahead with acquiring these private lands, but never took any action," Sumanthiran told AFP. "That is why I went to court."
Sumanthiran said security forces in the northern Jaffna peninsula still occupied about 3,000 acres.
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