Kenya's president has ordered the repossession of land, stretching over 2,000 square kilometres, which he said was taken "under dubious and corrupt circumstances" by 22 companies between 2011 and 2012.
Uhuru Kenyatta made the announcement on Thursday following evidence released in a report by the land ministry about the area in northeastern Lamu County.
Kenyatta said the vast coastal zone, nearly the size of Luxembourg and located around a proposed multi-billion dollar port area, had been stolen, fuelling a wave of massacres.
Last month, more than 100 people were killed in a wave of attacks, largely claimed by Somalia's al-Qaeda-linked al-Shabab fighters, although Kenyatta has previously said those killings were the work of "local political networks."
"This criminal conspiracy has dispossessed individuals and families living in this region of their land and opportunities for improving their well being," Kenyatta said.
"It has also helped fuel the current insecurity being experienced in the region, and frustrated our efforts in building cohesion in the country."
The area, near Kenya's restive border with war-torn Somalia, surrounds a planned $24bn port project zone intended to serve nations across east Africa, including oil pipelines to South Sudan, the AFP news agency reported.
"This criminality will neither derail nor delay one of the most transformational regional trade and investment projects of our time," Kenyatta said, after meetings earlier on Thursday with the leaders of Ethiopia, South Sudan and Uganda.
The land also surrounds the UNESCO-listed tourist island of Lamu, once popular with high paying visitors, including Hollywood celebrities, but now off limits according to most travel warnings issued by Western nations.
Kenyatta said he ordered the land ministry "to revoke and repossess these land parcels with immediate effect".
Despite the president's insistence that local groups carried out the recent attacks, al-Shabab said the killings were further retaliation for Kenya's military presence in Somalia.