As the Nigerian population increasingly becomes urban; the situation has had harmful societal, environmental, health and infrastructural effects on the urban centres. The situation is exacerbated by the fact that the rate of land urbanisation in the country is moving at a slower pace; thereby placing pressure on the existing urban centres. Research conducted on urbanisation in Nigeria has revealed that the rate of urbanisation is unsustainable, serves as a constraint on economic development, and Nigeria’s cities are among the worst to live in. Data on the urbanization policies of various governments, globally, reveals that Nigeria is one of the few countries in the world without a clear urban policy. Meanwhile, Nigeria’s population continues to increase and is expected to have doubled by 2050. It is against this backdrop that this paper undertakes a multidisciplinary study of how the law’s adoption of fiscal incentives can help drive sustainable urban development in Nigeria. This paper argues that this will help the state governments in the decongestion of the existing urban centres (as the population urbanisation increases), ensure the creation of new urban centres, utilise fiscal incentives to attract businesses/ urban population to the new centres, and have sufficient fiscal revenues to sustainably manage the urban centres. This paper comparatively analyses the contribution of China’s legal system to its state-led land urbanization moving at a faster rate than its population urbanisation, thereby avoiding the ills associated with urbanization such as congestion, unemployment, etc. With China and Nigeria sharing a similar decentralized tax and fiscal system, state ownership of land, and a large population; this paper argues that the Chinese model can be adopted successfully in Nigeria.