Situated in Sri Jayawardenepura Kotte, the administrative capital, it is built on an island, surrounded by the Diyawanna Oya.

On 29 January 1930 the British Governor of Ceylon, Sir Herbert Stanley (1927–1931), opened a building fronting the ocean at Galle Face, Colombo, designed for meetings of the Legislative Council.

While Stanley Tillekeratne was the Speaker (1970–77), the leaders of the political parties entrusted the drawing up of plans for a new Parliament building to architects, but the project was subsequently abandoned.

On 4 July 1979, then Prime Minister Ranasinghe Premadasa obtained sanction from Parliament to construct a new Parliament Building at Duwa, a 5 hectares (12 acres) island in the Diyawanna Oya (off Baddegana Road, Pita Sri Jayawardenapura-Kotte) about 16 kilometres (9.9 mi) east of Colombo.

The building was designed by architect Deshamanya Geoffrey Bawa and built by a Japanese consortium of two Mitsui Group companies for a cost of over $25.4 million US.