The Water's Edge golf course in Colombo was ordered returned to the state and its clubhouse is now run by the country's Urban Development Authority.
Pratap Ramanujam, secretary to the urban development ministry, said the golf course itself was being allowed to return to the wild as a water retention wetland.
But the former clubhouse is being managed as a centre which offers hospitality services.
"Soon after the take-over by the government there was a reduction in commercial activities, but now business is picking up," Ramanujam said.
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He said the firm that operates the clubhouse has turned a profit last month. The performance is expected to improve this month.
He said 50 workers who had worked in the golf course had left voluntarily, but clubhouse employees had been retained.