Established on October 22, 1976 under the Punjab Development of Cities Act, Multan Development Authority is a successor body of Multan Improvement Trust (MIT), which was established in 1944 under Punjab Town Improvement Act, 1922. Scope of MIT was limited only towards residential and commercial schemes located in municipal boundaries, which was then called city area. MDA's area of jurisdiction spreads over 362 km², which covers almost all important establishments like Bahauddin Zakariya University, Pak Arab Fertilizer and Industrial Estate and others. Vital responsibility of MDA is to evolve policies and programs relating to launch new housing schemes and for residential development of the city and important engineering projects. MDA has been launching a number of developmental projects especially in housing sector consisting of more than 20,000 plots of various sizes and uses.

Multan Development Authority has staffed many skilled personnel’s from different disciplines. The UD Wing MDA is administratively divided into four directorates i.e. Directorate of Estate & Land Management; Directorate of Town Planning; Directorate of Engineering; and Directorate of Finance & Administration having an overall strength of 653 employees (including four fix-pay legal advisors).

In April 1992, Water & Sanitation Agency (WASA) was created to provide better services to Multan vicinity in water supply and sanitation sector.

Prior to enactment of Local Government Ordinance of 2001, MDA was under direct administration of Government of Punjab, Minister of HP&EP being head of Governing Body. After LGO 2001, the City District Nazim is head of Governing Body and all policy matters are being decided locally a drastic step towards local governance.