The 32-year-old man swallowed the diamond whilst standing at a stall at Sri Lanka's annual gem and jewellery show.
Yahoo! reports that when the man's scheme had been discovered he fled from the exhibition, only to be apprehended by police later.
He was then administered laxatives and constantly monitored by armed guard until the 7.2mm-in-diameter diamond was retrieved.
Police spokesman Ajith Rohana said: "He passed the stone this afternoon... and the evidence is now with gem experts."
He added that a judge had visited the alleged thief in hospital and remanded him in custody on the charge of theft.
The diamond's owner Suresh de Silva said that the man had offered to pay for the stone, but that exhibition organisers intended to press charges.