Reclamation of Hulhumalé began on October 16, 1997, on the Hulhulé-Farukolhufushi lagoon 1.3 km (0.81 mi) off the northwest coast of Malé.

Initial reclamation (or Phase I), consisting of 45% of land mass, 188 hectares (460 acres), was carried out by the Ministry of Construction and Public Works (MCPW) at a cost of USD 11 million.

All the works involving reclamation and coastal structure development covered in Phase I were completed by June 2002, and 1,000 residents moved to the island in 2004.

[3] A basis of development known as Phase I was formed under the first Master Plan which was completed in July 2001 by a consortium of consultants from Singapore with the contribution of many government agencies, committees and individuals.

It conceptually defines the long-term land use and development strategy (including urban design proposals, transportation plans and utility infrastructure) with considerations for future infrastructure connections to the adjacent Phase II and planned airport extension areas.