ITC Limited, the India-based franchisee for the Sheraton Group, is to invest $300m in a luxury hotel and mixed-use development project in Colombo, Sri Lanka.

The project will be developed on a five-acre site, which will be given on a 99-year lease for $73.5m.

Sri Lankan Minister of Economic Development Basil Rajapakse said the cabinet will lease out a block of land that was previously allocated to China-based CATIC/AVIC International Hotels Lanka Ltd for a mixed-use development project.