The "Seenigama Sports Project" near Galle will promote inter-village sports activities and training sessions for boys and girls.
Seenigama village was one of the worst affected by last year's tsunami.
"Despite the horrific images we saw on television, I don't think people in the western world have an idea of how traumatic the events of December 26 were," said former Aussie skipper Waugh.
"Many have lost family members and friends, and this will always be in their memory. We can, however, try our best to restore some degree of normality to their lives," he added.
Both Waugh and Dev also visited the Galle stadium which is a regular Test centre but has not been in a good enough condition to host matches since the tsunami.
"It is almost a year on and now that the major relief agencies are winding down their work, it is up to voluntary organisations to do what they can," said former India captain Dev.