Milandhoo was uninhabited in 1997, when the Maldive's Minister of Atolls Abdulla Hameed launched a project to construct houses there and relocate residents from the neighboring island Maakandoodhoo, where the water had become contaminated. The resettlement was hastened in 2004, when the Boxing Day tsunami severely damaged Maakandoodhoo. The government officially recognized Milandhoo as an inhabited island on 20 March 2005. With more than 2140 residents, it is now the most populous island in Shaviyani Atoll.