It also houses one of the main Military Hospitals operated by the Sri Lanka Army Medical Corps.
Sir Kanthiah Vaithianathan, the first Permanent Secretary to the Ministry of External Affairs and Defence took the decision to establish a cantonment in Panagoda in 1949 with the formation of the Ceylon Army that year.
In 1950, 350 acres of land was purchased by the government and construction began on 10 October 1952 and was completed in 1959.
Prime Minister Wijeyananda Dahanayake ceremonially opened the main building on 22 December 1959.
On 23 September 2009, the Security Forces Headquarters – South was formed at the Panagoda Cantonment.