MAS Fabrics (Private) Ltd will be located in Thulhiriya, north east of Colombo, Sri Lanka's Board of Investment said in a statement.
"We partner with those who identify with our own value proposition; we are focused on innovation, and are eager to invest in it," Sharad Amalean, deputy chairman of MAS Holdings was quoted as saying by the BOI.
"This is our biggest technology driven investment to date¦"
Thulhiriya used to house a now-defunct state-run textile mill which was built when an anti-import anti-free trade ideology was at its height and 'import substitution' was a goal in itself.
At the time Sri Lankan citizens were cornered by high import duties and forced to buy kerosene smelling fabric made by a state-run fabric milling oligopoly.
They were later privatized, and failed after citizens were given more freedom to buy cloth to cover