Well known amongst divers for decades Hikkaduwa was ultimately declared a wild life sanctuary in 1979, a nature reserve in 1988 and upgraded to a national park in 2002. It was the first marine protected area in the country and only one of two marine national parks. Covering an area of about 101 ha it is home to a highly diverse fringing coral reef located at a depth of 5 meters that extends about 4 km out to sea from the beach. While stony corals are the dominant species here, stag horn, elk horn, brain, table and star corals are also found in large concentrations. Additionally the reef is also home to about 175 species of reef fish, sea grass and algae which in turn nourishes, crabs, prawns, shrimps, oysters, sea worms and many species of ornamental fish. Blacktop reef sharks have been found along the outer edge of the reef while Hawksbill, Green and Olive Ridley turtles visit the reef and have been declared as endangered.
Diving, snorkeling and viewing the coral through glass bottom boats have been popular activities in Hikkaduwa in addition to swimming in the warm blue sea and sun bathing. Under new guidelines issued in 2011 the marine park area has been demarcated into snorkeling, diving and bathing zones to accommodate the needs of the public and tourists so that all visitors will have a safe an enjoyable experience. A ticketing scheme has been put into place for the use of the beach and an agreement reached with the tour boat operators as well.