Qatar Diar Real Estate Investment Company has signed a deal with Sri Lanka's Board of Investment.
Sri Lanka has also signed other agreements on air services, tourism, legal, cultural and technical co-operation.
Qatar ruler Sheikh Hamad Bin Khalifa Al Thani made a two day state visit to Sri Lanka accompanied by ministers, officials and a group of businessmen.
Qatar is expected to come up with a detailed proposal to develop seven islets in Kalpitiya, off Sri Lanka's North Western coast.
Deputy economic development minister Lakshman Abeywardene said though details have not yet been worked out, investment proposals will be routed through a high level committee headed by respective foreign ministers.
An official familiar with the matter said the islets are likely to be developed as a connected project.
The Middle East has become an important source of visitors particularly around mid-year in July which is off-season for Western winter season visitors.