The announcement was made by Cabinet spokesman Dr. Rajitha Senaratna today.

In order to avoid creating a misunderstanding with the Chinese government, the Cabinet decided to go ahead with the Port City Project after considering the feasibility report and the environment impact assessment, he told reporters in Colombo.

President Maithripala Sirisena will also discuss the project during his visit to China in March.

The government earlier said it would review the project over concerns the Chinese company was procuring land in a high-security zone.

Former President Mahinda Rajapaksa heavily depended on China for infrastructure and is said to have borrowed over US$6 billion for mega projects since the end of the conflict in May 2009.

China would have suffered heavy losses if the new government had decided to halt the Colombo Port City, which started construction in September 2014.

President Maithripala Sirisena has promised to review all China-aided projects.