The fund, Cricket-Aid, was launched at a ceremony at the headquarters of Sri Lanka Cricket here during which cricket chiefs and leading players lit oil lamps in tribute to the more than 30,000 Sri Lankans who died in the tragedy.
"Many of them were ardent cricket fans who had cheered us through the years," said national captain Marvan Attapatu after unveiling the logo of the fund -- a pair of cricketing gloves holding up a map of Sri Lanka. "It is our turn to help them."
Cricket-Aid hopes to raise two million dollars through appeals to cricket-lovers locally and internationally, through charity matches in various parts of the cricketing world, and through sales of merchandise such as autographed shirts and caps.
Thilanga Sumathipala, former president of Sri Lanka's Cricket Board who has been named to head Cricket-Aid, said the money would be used to provide immediate assistance in two of the hundreds of camps set up to house the 860,000 people displaced in the devastation.
In the longer term, it would build four "cricket villages", one each in the north, south, east and west of the island, comprising 50 small houses each to accommodate families who lost everything in the tsunami.
The villages would have full facilities including a commercial centre, a religious centre and a children's park.
The fund would also sponsor a foster parent scheme for children who lost both parents in the tragedy.
"We hope a 'tsunami-player' may one day emerge from these projects and play for Sri Lanka," Sumathipala said.
Former skipper Sanath Jayasuriya said top priority would be to raise funds internationally.
"Our team will tour cricket-playing countries where they will play charity games," he said.
Appeals had also been made to the world's 72 cricket boards and already positive responses were being received, including from Vanuatu, Fiji and Kenya.
At the end of the launch ceremony, a number of pledges were made, including one of 25,000 dollars from the Emirates Cricket Board.
Sri Lanka are a popular team around the world and rank third among One-day International sides and sixth among the Test-playing nations.