Lumbini Development Trust was formed by the Government of Nepal as provisioned by Lumbini Development Trust Act 2042 (1985) in 1985 to implement Lumbini Master Plan, explore, excavate and conserve archaeological sites scattered in Kapilavastu, Rupandehi and Nawalparasi districts. The LDT was constituted in order to present before the people of the world and commitment of Government of Nepal to project goal and ideal of development of Lumbini.

The jurisdiction of LDT includes the places Tilaurakot (ancient Kapilvastu) Gotihawa, Niglihawa, Sagarhawa, Sisaniyakot, Araurakot, Kudaan (Kapilvastu), Devadaha (Rupandehi), Ramgram (Nawalparasi), which are directly or indirectly related with the life of the Lord Buddha and his birth place, Lumbini and it shall include other areas as specified by Government of Nepal by a notification in Nepal Gazette. Provided that, while specifying places in such manner, only the places which are directly or indirectly related to the life of the Lord Buddha may be specified.

The Trust receives funds from the Government of Nepal, national and international Buddhist and non-Buddhist organizations and generates internal income for administrative and development works.