The second phase involves expanding the harbhour to have container handling facilities.
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Hewageegana was quoted as saying that formal expressions of interests will be entertained towards the latter part of the project.
The second phase is expected to be completed by 2015, the report said.
The Sunday Island newspaper said an 808 million US dollar second phase of Hambantota port financed by Exim Bank of China will throw up about 20 million cubic meters of sand when the seabed is dredged.
The report quoted the head of southern port development, at Sri Lanka's ports authority Agil Hewageegana as saying that the agency was awaiting clearance from the coast conservation agency to dump the sand and build the island.
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Foreign investors have already expressed interest