Transport Minister Bandula Gunawardana told reporters in Colombo that the cabinet had approved the removal of the tree.
The Sri Lanka Legume (Crudia zeylanica) -- a flowering tree whose pods are not known to be eaten by humans -- was first classified in 1868 and last found in 1911.
In 2012, it was declared extinct until the surprise discovery in 2019 of a lone tree near Colombo.
But the eight-metre (26-foot) tree was set to be felled in February 2021 to allow the construction of a motorway, sparking uproar from environmentalists and the country's influential Buddhist clergy, who had blessed the plant to give it sacred protection.
Gunawardana said a study showed that 40 other trees of the same family still existed, but he did not provide details on where they were located.
"It is a crime to have held up the construction by propagating a myth that this was the only tree of its kind," Gunawardana said.
He said bypassing the tree would have added another 15 billion Sri Lankan rupees ($50 million) to the cost of the road construction.
Local residents said workers had uprooted the tree using heavy equipment and had taken it to an undisclosed location.
"There were a few workers... they uprooted the tree after chopping off some of the branches," one resident told the Swarnavahini TV network.
"Before we could react, the tree was removed."
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