With the population growth and associated high levels of urbanization, sustainable urban development has become a critical issue in Sri Lanka. A land information management tool was developed for the Thimbirigasyaya ward of the Colombo Municipal Council (CMC) Sri Lanka using a Geographic Information System incorporating multi layer analysis. The layers incorporated contained the spatial distribution of land parcels, buildings along with zoning details established by the Urban Development Authority. This paper presents the potential of the GIS based system for rational land parcel management by considering various scenario with respect to the presently available zoning, zoning regulations combining with land parcel and building information. Potential use of GIS for Land Management in the Colombo city including real estate development and also drainage improvement is discussed. Proposals are made for the decision makers to take into consideration when executing responsible action. In the analysis it was identified that the Primary Residential Zone meant for high rises is mostly of low rises and there is a significant potential for development. Overlay operations enable a manager to identify amalgamation options to suit the land development policy of the UDA. The tool also demonstrates the identification of old buildings that may be worthy of demolition to make room for planned development. The tool also enabled the identification of main user types within identified zones so that a decision maker could propose better economic use of land through means of relocation. This casestudy presents not only the importance of land clearance management but also the vast potential for policy making and rational management.