Buttler, who hit a magnificent century in defeat on Sunday, was given out in the 44th over after bowler Sachithra Senanayake, the subject of an International Cricket Council investigation for a suspicious action, removed the bails as the batsman wandered out of his crease.
Buttler had been warned for doing the same thing in the previous over and following Senanayake's appeal, umpire Michael Gough asked Sri Lanka captain Angelo Mathews if he wanted the appeal to stand.
Loud boos erupted around the ground as Buttler departed for 21, his dismissal overshadowing a mediocre England batting display as they stuttered to 219 all out with the series poised at 2-2.
Cricketing law 42.15 states: "The bowler is permitted, before releasing the ball and provided he has not completed his usual delivery swing, to attempt to run out the non-striker."
Former England captain Michael Atherton said the correct decision had been made.
"It's fair enough," he told Sky Sports.
"The way I grew up playing in the leagues you were told to stay in your ground until the bowler releases the ball. You've got to keep your bat in the crease. You see a lot of batsmen wandering aimlessly out of their ground."
Alec Stewart, the most capped English test cricketer of all time, agreed.
He told the BBC: "First of all it's not ideal. With the laws of the game as Sri Lanka are entitled to appeal.
"They warned Buttler. Buttler did exactly the same thing again. Senanayake is allowed to do that and [captain Angelo] Mathews is allowed to uphold the decision. We don't like to see that, but why have that law when it can't be used."
