In 1951, the government made the move to modernize Kai Tak Airport and, as a side project, develop Kwun Tong into a new town. So started the most extensive reclamation at the time. To expand the airport, large-scale demolition and reclamation were carried out in Kowloon East since 1956, which involved leveling the remaining part of Sacred Hill and most of Kowloon Tsai Hill to fill up the airport coast near Kowloon City, where an apron was to be built. The water off Kowloon Bay was also reclaimed to construct a modern runway of over 3 kilometers in length.

At the same time, Kwun Tong was developed into the first satellite town of Hong Kong. Reclamation was undertaken in three phases from 1956 to 1967, creating 641 acres of land. The whole project ran smooth and efficiently because the hills of Kwun Tong, such as Black Hill and Crocodile Hill, were weathered and easy to exploit. Upon completion, the former Kwun Tong coast was replaced by two main roads, namely Ngau Tau Kok Road and Kwun Tong Road, while the Kwun Tong district was divided into two parts, a residential quarter north of Kwun Tong Road and an industrial quarter south of it. The coast of Ngau Tau Kok became Ngau Tau Kok Road after the first phase of the reclamation, and the new waterfront, which abutted the main road, was where small shipyards clustered about.