Hegseth said a torpedo fired from a US submarine sank the vessel.
At least 80 were people killed in the strike, Sri Lanka's deputy foreign minister told local television on Wednesday.
Sri Lanka’s foreign minister, Vijitha Herath, told parliament the vessel had been identified as the Iranian warship IRIS Dena.
Sri Lankan authorities said they had rescued 32 people from the ship and recovered several bodies from the sea.
Sources in Sri Lanka’s navy and defense ministry said the warship had been attacked by a submarine and that at least 101 people were missing after the incident off the island’s southern coast.
Sri Lanka’s navy said it received a distress call from the Iranian vessel and launched a joint search and rescue operation with the air force. The 180-crew frigate issued a distress call at dawn.
Authorities said the immediate priority was rescuing survivors, with the cause of the incident to be investigated later.
Sri Lankan forces said they had not observed any other ships or aircraft in the area at the time of the incident.
“We are hopeful we can rescue more people and will continue operations until we are sure,” the navy spokesperson said.