In the project's second phase, a large leisure component will be introduced with a marina for pleasure craft and a passenger terminal.
Galle is already a port of call for yachts.
Sri Lanka Ports Authority is also expected to call for fresh bids to develop a container terminal in Colombo by July.
Corrected - contract value The project aims to expand the current port's capacity to meet future demand with a new breakwater, harbour basin with a deeper draft and multi-purpose terminal to handle bigger vessels.
The project is funded by a 14.5 billion yen (about 13.8 billion rupees) Official Development Assistance loan from the Japan Bank for International Cooperation.
Bids, which are open to only Japanese firms, will be opened on July 3, a senior Sri Lanka Ports Authority official said.
The work involves building the breakwater and multipurpose terminal, dredging the approach channel and turning basi