The park will be populated with captured crocodiles that are now posing a threat to villages in the Gamapaha district, north of Sri Lanka's capital.
"The park would be similar to that of the elephant orphanages," The Sunday Times newspaper quoted Chandrawansa Pathiraja, director general for parks at Sri Lanka's ministry of economic development as saying.
"We will be having a permanent place to relocate crocodiles, in the event they pose a threat to people.
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He said the park would be built as a tourist attraction where visitors could come for short visits or spend a day. Facilities would also be provided for school children.
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Pathiraja was quoted as saying that the park will be protected by nets prevent crocodiles escaping into villages and a research centre backed by environmental organizations will be set up.
In some East Asian nations crocodiles are farmed. Crocodile farms are also tourist attractions.