Prithvi-2 is capable of carrying 500-1,000 kg of warheads and is powered by liquid propulsion twin engines, the sources said.
There was no casualty or damage to property, Superintendent of Police Niti Sekhar said.
Another test launching of the missile is slated to be taken up later during the day.
The PTA, developed by the Aeronautical Development Establishment, Bangalore, is designed to perform discreet aerial reconnaissance of battlefield and target acquisition.
The Indian Air Force has given the go ahead for induction of the indigenous surface-to-air Akash missile.
This is the third test firing of the missile in the last five days, the sources said.
The failure of the Agni-III was a major dampner to defence scientists as it came even as Pakistan went ahead with a series of successful missile tests of its clandestinely acquired Hatf, Gauri and Shaheen range of missiles in 2006.
As Prithvi has gone into production, one of the products from the assembly line picked up at random might be test-fired.
The indigenously developed surface-to-surface missile, blasted off at 10.52 am from a fixed platform with the help of an auto launcher in the launch complex-4 of the ITR, located about 72 km from Balasore, defence sources said.
The missile, which has a launch weight of 700 kg, can carry a warhead of 60 kg and operated in conjunction with a Rajendra surveillance and engagement radar being developed by the Electronic Research and Development Establishment.
The supersonic anti-ship cruise missile was jointly developed by India and Russia.
The missile, weighing 650kg, can carry a 50kg payload over a distance of 25km.
The medium range surface-to-air missile was on Monday fired from a mobile launcher.
India today successfully test fired indigenously-developed surface-to-air Akash missile with a strike range of 25 km and capability to carry warhead of 60 kg from the Integrated Test Range at Chandipur as part of a user-trial.
Nirbhay, India's first home-grown subsonic cruise missile, was on Friday successfully test-launched from the Interim Test Range in Chandipur, near Balasore in Orissa.