It is located on the north western corner of Yanbye Island on Combermere Bay, and is 250 miles (400 km) north-west of Yangon.

Earliest traces of history dates back to the 8th century, during the reign of Sula Taing Chandra who founded the settlement.

[4] On October 22, 2010, Cyclone Giri made landfall on the west coast of Myanmar just north of the town at category five strength.

[5] These construction projects will allow China to directly obtain oil and gas from the Middle East (via the port terminal at Kyaukphyu), thereby avoiding shipping through the Malacca Straits.

This terminal and pipeline are being built by South Korea's Daewoo International in a consortium with state-owned Myanmar Oil and Gas Enterprise (MOGE) and others.

From May 2013, this pipeline is planned to pump about 12bn cubic metres of natural gas annually, most of which will also go to China via nearby Maday island.

These oil and gas Sino-Burma pipelines projects are supervised by a Myanmar "Kyaukphyu Special Economic Zone" agency and are estimated to use about U$3bn of investments and to have the potential of creating over 200,000 jobs, while additional capital will be required to develop a port for dry containerized and bulk cargoes, as well as a railway which will link Kyaukphyu to Kunming, in Yunnan.

In this respect, there has already been protests by some locals against the consequences of some of these projects, such as potential impact on fishing or land confiscations which may be conducted by authorities for these terminals and pipelines.

By 2025, the consortium plans to build a roughly 1,000-hectare industrial park and Myanmar's highest-capacity port, with facilities able to handle 7 million 20-foot-equivalent-units (TEU) of containerized cargo per year.

Some analysts claim that the Kyaukphyu deep-water port has a strategic dimension as part of China's Belt and Road Initiative and String of Pearls strategy.

[18] The port is part of the 21st Century Maritime Silk Road that runs from the Chinese coast to the south via Singapore towards the southern tip of India, then through the Red Sea via the Suez Canal to the Mediterranean, there via Haifa, Istanbul and Athens to the Upper Adriatic region to the northern Italian hub of Trieste with its rail connections to Central Europe and the North Sea.

[23] It will also connect to Kaladan Multi-Modal Transit Transport Project via 311 km link to be completed by 2021–22, from Kyaukhtu in north to Ann in south and then south-east to Minbu.