The Indian Ocean island nation attracted 260,525 foreign visitors in the first quarter, 21.1 percent higher than the same period last year, while the revenue jumped 28.5 percent to $174.5 million in the first two months of this year.
"According the data up to March, we can reach more than 1 million tourist arrivals this year," higher than the earlier target of 950,000, Deputy Economic Development Minister Lakshman Yapa Abeywardena told reporters in Colombo.
"The revenue will be well over $1 billion this year," he later told Reuters.
The island nation has originally targeted the revenue to just hit around $1 billion in 2012.
Annual visitor numbers have been rising every month since a 25-year civil war ended in May 2009.
In 2011, arrivals jumped 30.8 percent to a record 855,975 from a year earlier, beating Sri Lanka's previous record of 654,476 in 2010, while the revenue leapt 44.2 percent to a record $830.3 million in 2012 after gaining 64.8 percent in 2010 to $575.9 million, government data showed.
Tourism is one of the main foreign exchange earners for Sri Lanka's $59 billion economy along with remittances from expatriate workers, garments and tea.