After the establishment of provincial councils in 1987, there were changes in the local government system. Accordingly, with the provincial government becoming a subject of provincial councils, the local government institutions of Sri Lanka came into existence. They are functioning under three local government systems as municipalities, city councils and local councils. Accordingly, under the Regional Council Act No. 15 of 1987, the Regional Councils were established instead of the Development Council system. Agalawatta Pradeshiya Sabha was established on 01 January 1988 under the Pradeshiya Sabha system that operates in this way. Accordingly, the first Pradeshiya Sabha is governed under a special commissioner. Agalawatta Divisional Deputy Governor H.I. Mr. K. Mahanama was appointed as the Special Commissioner of the Agalawatta Regional Council. The Agalawatta Development Council sub-office area belonged to the Agalawatta Regional Council, and the Meghathanna Development Council sub-office area which belonged to the Agalawatta Village Council was established as a separate local council. Due to the separate establishment of Agalawatta Pradeshiya Sabha and Wallawita Pradeshiya Sabha, some assets and properties of Agalawatta Pradeshiya Sabha belonged to Wallawita Pradeshiya Sabha.