This is another question I get asked a lot by foreigners who are looking for land to either setup a house or a business on. If you are a foreigner I will say short answer is no, you cannot officially purchase a piece of land in Sri Lanka free hold (Meaning it is yours forever to pass down generation after generation if you so chose). However that in no way means you cannot get something to call your own for the rest of your life and to pass down to your children and grandchildren if you wish.
So there are a couple of options available to do this.
The most common and most simple is a 99 year lease. I think this is quite self explanatory, its exactly that, you are leasing the land for 99 years. I think this would be the most suitable choice for most people. This will allow you to pay an upfront amount for the land and do as you wish with it for the remainder of the lease, you can build what you like on it as it is yours. You also have the option of selling the remaining years if you wish down the track (99 years in the same place can get a little stale...)
With this option, as stated before, you can live the rest of your life there, pass it down to your children and even grandchildren as you would if it was purchased free hold.
According to the information available, after the 99 years are up the land will be reclaimed by the country and anything that is built on it, and you will not be reimbursed for anything remaining on the land (a house for example), however I cannot find examples of any cases where a 99 year lease has actually been retained by the same user for the entire time (unless you buy the land as a baby and live to be over 100 its not very likely to happen...). Also according to the information available, you can also potentially 'top up' the remaining years left on the lease, provided your agreement allows you to do so. (Eg there are 79 years remaining on the lease, you pay an agreed upon fee, the lease is reinstated to 99 years.)
The other option is a bit more complicated and takes a lot more effort, and personally I see no point in going down this road, however I will still mention it as it is an option.
The other option is to buy land for a registered company, and be the 49% share holder of that company, (this is the maximum percentage you can own in this line of business). Even though you are only the 49% share holder on paper, you can make sure contracts are drawn to make sure you have the final say in all decisions in regards to the block of land, and the 51% shareholder is merely just a name on paper. This way you will be able to make the final decisions on any purchases made by the company, eg a block of land to build a house.
If you then see fit, you will then be able to transfer ownership of the company to your children, then they can do so to their children, and so on and so forth.
As you can see this is another option to owning land, but a far more complex one that will require you to constantly pay fees such as annual registration fees, company secretary fees just to name a few, for the remainder of the businesses existence.
In my opinion the 99 year lease is definitely the way to go, and lets face it, I don't know about you but I haven't come across too many people in my life who have had a block of land in their family for over 100 years.
Finding land to buy is just like anywhere else in the world, there is always plenty available at different prices, its just a matter of finding the right one. If you speak to locals about your plan to buy land, I can guarantee 99% of them will know of atleast a couple of blocks they can show you. This isn't necessarily a bad way to go, however it is definitely important to be wary, make sure you do thorough research on the prices of similar blocks in the area and things of that nature before making any agreements. On top of that, make sure you get the deeds to the property checked by ATLEAST 2 seperate lawyers. There have been cases where people have bought land only to have a local claim it is theirs later down the track, and it can become a nightmare to get sorted.
Alternatively there are going to be a number of real estate agents in any area you are looking to buy, speaking to them will also be a good idea. But once again, be wary and do your own research. Just because they are an agency it in no way guarantees that you aren't at risk of some shady dealings!
Two handy websites you can use to look for land are http://www.ikman.lk and https://www.lankapropertyweb.com/ both of which will always have a lot of different properties listed for sale.