The Sri Lanka Parliament has passed the Port City Economic Commission Bill, which officially declares 269 hectares of land reclaimed from the ocean and annexed to the city of Colombo as the country's first special economic zone (SEZ) for services-oriented industries.
The bill was passed on Thursday with 149 votes in favour and 58 against, reports Xinhua news agency.
Under the legislation, a President-appointed commission will be established to govern the SEZ.
It will enable the businesses to operate in any recognized foreign currency within Port City.
After the Port City bill was tabled in Parliament on April 8, 19 petitions were filed with the Supreme Court of Sri Lanka.
The Supreme Court's ruling was delivered to Parliament on Tuesday, saying that the bill could be passed with a simple majority provided key clauses be amended to confirm with the country's constitution.
Parliament debates were held on Wednesday and Thursday, following which a majority of lawmakers voted to approve the bill amended in line with recommendations by the Supreme Court.
Prime Minister Mahinda Rajapaksa on Wednesday told Parliament that the Port City project would create 200,000 jobs in the first five years, with the majority going to Sri Lankan nationals.
He said that the Port City bill provides a competitive framework to attract investment.
Port City Colombo Director of Sales and Marketing Yamuna Jayaratne said that Sri Lanka already enjoys several advantages in the cost of doing business in comparison with established and mature services hubs such as Hong Kong and Dubai.
Colombo is planned to become a major financial and services hub in South Asia.