Sri Lanka suffered their heaviest defeat in Test cricket history on Saturday as Australia flexed their muscles to take a 1-0 lead in the two-match series with a crushing victory by an innings and 242 runs.

The contest was wrapped up before tea on day four, with rookie left-arm spinner Matthew Kuhnemann's match-winning spell delivering him career-best figures of 9-149 over both innings.

"We were put under pressure," Sri Lanka skipper Dhananjaya de Silva said afterwards. "The batters should have put up a better show."

Kuhnemann underwent surgery only two weeks ago on a broken right thumb sustained during the Big Bash League and battled through the match in pain, requiring constant medical attention.

He was well-supported by the ever-dependable Nathan Lyon, who spun a web around the Sri Lankan batters to finish with seven match wickets.

Sri Lanka's heaviest defeat before Saturday was in Nagpur in 2017, when India hammered them by an innings and 239.

Sri Lanka resumed on 136 for five overnight but their first innings folded for 165, losing their last five wickets for a mere nine runs.

Put straight back in to bat chasing 489, they lost three wickets before lunch and then capitulated in the second session -- a humiliating finish for a team once renowned for its prowess on turning tracks.

Dinesh Chandimal had waged a lonely battle in the first innings to top-score with 72 and, with Angelo Mathews, stitched together one of only two 50-plus partnerships in the second.

However, he was sent back for 31 on the last ball before lunch when he gloved Lyon to Travis Head at short leg.

Oshada Fernando failed to make an impact in his return to the side, undone by a sharp inswinger from Mitchell Starc that trapped him plumb in front for six to go with his first innings seven.

Former skipper Dimuth Karunaratne's horror run with the bat continued after an avoidable dismissal for nought by Todd Murphy.

- 'Tough place to play' -

Rain forced an early lunch on day three before washing out the final two sessions.

Australia declared on 654-6 late on the second day after opener Usman Khawaja's career-best 232.

"Galle is a tough place to play cricket and we are very happy with this win," Khawaja said.

"I've played a lot of cricket in Sri Lanka, this being my fifth tour. I've made lot of mistakes before. I guess all that experience came in handy in this game."

Stand-in skipper Steve Smith also had a game to remember, becoming only the fourth Australian to breach the 10,000-run mark in Test cricket on the first ball he faced.

He finished his innings with a masterful 141, while wicketkeeper Josh Inglis hit a century on debut.

Galle will host the second and final match of the series next week before a two-match ODI series in Colombo.