In 1980, General Sri John Kotelawala CH, KBE, LLD, having understood the necessity of a suitable location for the proposed Defence Academy, informed the Commander of the Army Lieutenant General JED Perera VSV, D.Litt.(Honoris Causa), FIBM of his intention to donate the Kandawala Estate, the 48 acres land with its moveable and immovable properties to the Government for establishing a Defence Academy.

This offer was gladly accepted and initial steps were taken to set up the Academy. By this time Sir John was promoted to the rank of General and when he passed away on, 02nd October 1980, the Government and the Services decided to honour him by naming the Academy after him. It was thus named as the General Sir John Kotelawala Defence Academy.

The Academy was formally opened on the Army Day, 11 October 1980 at a ceremony held at Kandawala Estate. His Excellency the then President J.R. Jayewardene unveiled a plaque to commemorate the event. However, the Academy did not have the necessary infrastructure and resources to commence its own programmes immediately.

In February 1981, a temporary arrangement was made for Service Officer Cadets to follow courses in Engineering and Physical Science in the Universities of Moratuwa and Colombo respectively.

The Act of Parliament cited as the Sir John Kotelawala Defence Academy Act No. 68 of 1981 and several later amendments effected the establishment of the Academy. The name of the Academy too was later amended to General Sir John Kotelawala Defence Academy.

In 1986 the Board of Management of the KDA decided to elevate the Academy to the status of a University, which would confer the degree of Defence Studies on Officer Cadets who successfully complete the degree programme. Consequently, the Act of Parliament No. 27 of 1988 elevated the Academy to University status and its first convocation was held in 1991.