Abstract: Traffic congestion is an adverse problem in the world and Colombo city incurs a huge negative impact from traffic congestion. The number of vehicles drive into the Colombo city increasing day by day and the roads are congested most hours of the day. Among several techniques, which can use to reduce traffic congestion, this research aims to give a solution by reducing the number of vehicles enter to the city. Therefore, motive of this research is to introduce a model to reduce traffic congestion in Colombo city by establishing parking locations in critically con-gested areas. In order to fulfil this objective, concept of cut in graph theory is applied. Fur-thermore, to analyse the traffic situation and to evaluate traffic measurements, multimodal traf-fic simulation software PTV Vissim 9 is used.