The 350 million US dollar investment with a Sri Lankan partner envisages a luxury hotel with 430 rooms and qualifies for floor investment to be listed as a strategic investment qualifying for special investment relief.
Under Sri Lanka's strategic development law, such incentives have to be presented to parliament.
The project has run into a political storm from the opposition and some religious figures for giving tax relief due a casino being associated with the development.
Packer and his joint venture Lankan partner, Colombo based, Rank Holding's Ravi Wijeratne are both in to gaming.
Sri Lanka's Board of Investment, which is under Abeywardena's investment promotion ministry, is charged with approving large projects and fast-tracking them.
"We are approving a 350 million US dollar mixed development and not a casino," he told reporters in Colombo.
"For example if there is a liquor store in a project, we do not approve it, it has to be dealt with by the Excise Department."
If the promoters wish to shift a casino to the project he said that was between the partners and nothing to do with approving a mixed development.
Wijeratne said last week that he intended to shift one of his casinos to the project and the total investment in the project may reach 400 million US dollars.
Abeywardena said the project will get a 12-year tax holiday, less than the 15-years given to a high profile hotel in Colombo to be built by Hong Kong based Shangri La.
Abeywardene said the opposition was saying that there were not enough large investors coming to Sri Lanka but when a high profile investor like James Packer came, various negative statements were made which could scare them off.