The role of the Malaysian government in promoting sustainable tourism is evident in the existing legal and institutional framework. There is evidence that indicate that Agenda 21 have been adopted in the national master plan. Sustainable Tourism aids in making a minimum impact on the local environment and culture as its essential tourism vision is narrower. Not only that, it helps in generating incomes and bring employment in the local communities while conserving the local ecosystems. The national ecotourism plan in Malaysia was intended to provide a general framework to assist the government in developing the country’s ecotourism potential. Under the plan, the definition of ecotourism follows that of the International Union for the Conservation of Nature (IUCN). Ecotourism is defined as responsible travel and visitation to relatively undisturbed natural areas in order to enjoy and appreciate nature that conserves the environment and sustains the well-being of local people. As a result, quite a number of the tourism destinations in Malaysia have been gazetted as terrestrial or marine protected areas in various categories such as forest reserves, wildlife reserves, sanctuaries, wetlands and marine parks. In order to ensure the success of the eco-tourism plans, joint efforts between the various levels of government, the private sector and the local communities were planned and carried out to maximize the economic, socio-cultural and environmental benefits it has to bring. Although Ministry of Culture, Arts and Tourism of Malaysia acts as a single coordinating body to spearhead the overall implementation of the National Eco tourism plan, the Ministry recognizes the imperative role of the private sector and specifies roles for all sectors of Federal, State and Local Authority, private business, NGOs and other players. The tourism industry contributed to economic development through among others, providing employment and business opportunities, infrastructure improvement and increased in foreign exchange and tax revenues. Even though Malaysia is a relatively new entrant into tourism activities as compared to its ASEAN neighbors, the industry has grown tremendously over the years. By 2020, tourism industry is a key foreign exchange earner for Malaysia, contributing to over 42% of the country’s balance of payment. The industry has provides an important source of income, employment and wealth to the country. Keywords: Sustainable tourism, Tourism development, Contribution to poverty reduction, Malaysia.