The transponders, supplied by Visma Consulting A/S, Denmark, will be installed on 1,500 'multi-day' fishing boats to monitor their whereabouts and type and amount of catch.
Installing the VMS was the main requirement of the EU - the biggest buyer of Sri Lanka's fish - to remove the ban, imposed because of the island's failure to act against Illegal, Unreported and Unregulated fishing.
"The monitoring centre will be fully functional at the Fisheries Ministry by end-May," said A. L. Tilakaratne, assistant director, Fisheries Department. "The equipment has begun to arrive."
Sri Lanka initially planned to give boat owners loans and grants to buy the equipment but now is giving it free because of the urgent need to remove the ban, which has affected livelihoods and export earnings.
Roshan Lyman, Commercial Attache of the Delegation of the EU for Sri Lanka, said all vessels are expected to be fitted by September.
"We want to ensure fish stocks are intact and the kind of fish we get is mature fish, that continuous replenishment of stock is taking place and fishing is done legally," he said.
"Now it's mainly a question of buying equipment and installing them. Indications are that by September most of the requirements can be met. Then it will take us about two months to evaluate and approve it, which should happen by year-end."
The 1,500 transponders and equipment for the monitoring centre will cost €4m.
Sri Lanka is believed to be the first country in South Asia to have VMS, with the closest other country to have one being Indonesia, Tilakaratne said.
The system will be used to warn boats violating international maritime borders and also provide weather forecasts.