On a proposal made by President Mahinda Rajapaksa, Cabinet approval was granted to allocate a sum of Rs. 812 Million to acquire the lands required by the Urban Development Authority for implementation of development projects.

Some of the projects identified to be implemented include construction of high income housing, middle income housing, hospital, police station, post office, city hotels, bus stand, market, theatre, banking square schools, and beach parks etc.

The Hambantota city is to develop as a center of business and industrial activities. City of Hambantota is also a candidate city to host the 2018 Commonwealth Games.