The Silabukan re-settlement scheme was first established in 1968 by the Department of Agriculture (DoA), it was purposely to provide a new settlement for the Segama people in Lahad Datu District whose livelihood was affected when the tobacco factory closed, also to provide a new shelter for the Dusun people who were affected by the floods from the Segama River with a total of 303 settlers. In 1969, the SLDB took over the mandate to develop the scheme with palm oil development on a ‘Turn-key’ basis. It was started by the Pembangunan Pertanian Silabukan (PPS) Sdn. Bhd., in 1981. The project was based on an agreement between the SLDB and PPS to develop 6000 ha of forested land in Silabukan, Lahad Datu for palm oil, and for the Silabukan Extension signed on December 22, 1980.

The first phase of the development was located along the Lahad Datu to Tungku Road with 303 participants recruited from different ethnic groups, mainly the natives Sabahan, the Dusun and Idaan from the Segama River area. Additional numbers (30%) of people were recruited from ethnic groups originating in neighbouring countries, groups such as the Bajau Laut, Suluk, and Bugis, with small numbers of Iban from the neighbouring state of Sarawak, as well as some Chinese, and Malay from the West Peninsula Malaysia. The second phase of the re-settlement involved mostly the Bugis ethnic group at around 30%, the Bajau at 25%, and the Idaan at 25%. During phase 3 and 4, recruitment of settlers mainly consisted of the Bajau, Banjar, Suluk, Javanese, Tidong, Murut and some other races.

In 2003, the SLDB introduced the leasing system into the Silabukan Estate where about 55 settlers (allocated individual land lots) 303 participants have now joined the programme. The rest of the participants are still under the management of the Cooperative of Silabukan Settlers Programme. Currently there are only 41 lots which are still under the leasing programme under the management of the SLDB.