The aircraft would be purchased under a $300 million credit line with Russia's state-owned arms trading business Rosoboronexport State Corp., a report by Sri Lanka's Sunday Leader newspaper said.
Cabinet spokesman Keheliya Rambukwella said up to 14 helicopters could be purchased but nothing would be decided until conclusion of the feasibility study.
Sri Lanka initially agreed to purchase up to 14 helicopters because of requirements during the war with the separatist Tamil Tigers.
"Since the war was coming to an end, we decided there was no immediate requirement to purchase 14 helicopters," he is quoted as saying by the Sunday Leader.
"I do not know when the study will be completed but I don't think the air force would utilize the entire facility and purchase 14 helicopters."
Rambukwella said the air force was looking at purchasing helicopters to expand its existing commercial air transport work in its company called Helitours.
The air force would pay back the loan from profits generated by the commercial venture once the helicopters are in service, he said.
Helitours Sri Lanka is "the largest and premier domestic air service in Sri Lanka launched in the 1972," its Web site says.
The Helitours fleet consists of 20 aircraft in a mix of fixed-wing and helicopters, including the Mi-17 as well as the Bell 206, 212 and 412 helicopters.
Helitours also operates the 45-passenger Antonov high-wing twin-turboprop AN 32 B aircraft and the Harbin Y-12, a 15-passenger high-wing twin-turboprop aircraft built by Harbin Aircraft Manufacturing Corp. in China.
Air force spokesman Group Capt. Andrew Wijesuriya wouldn't comment on the purchase of the Mi-17 helicopters but said Helitours would remain an ongoing commercial venture, the Sunday Leaders reported.
Helitours is run as a profit-making business and will continue as such until the country's domestic passenger services improve and the private sector starts to invest in the sector, said Wijesuriya.
Helitours is based at the air force's Ratmalana Air Base, otherwise known as Colombo Airport, which handles domestic as well as military flights.
The Mi-17 -- a transporter which can be fitted out as a gunship -- was designed by the Mil Moscow Helicopter Plant. The aircraft first flew in the 1970s and around 12,000 have been built, mostly by the Kazan Helicopter Plant in Kazan in the Republic of Tatarstan.