Local authorities complicit in corruption and encroachment were likely to be prosecuted, along with those who benefitted from the illegal deals, Governor Tri said.
The Public Sector Anti-Corruption Commission had been secretly gathering information on Phuket for six or seven months, the governor said.
On Friday the commission announced an investigation - with the cooperation of the Ministry of Natural Resources and Environment and the Department of Special Investigation - into suspicious property deals on Phuket's hillsides and shorefronts.
More are expected to follow, Governor Tri said.
''It's not possible for investors to be certain about their purchases unless they can be 100 percent certain of the legitimacy of the property,'' he said. ''On Phuket, local authorities have aided and abetted wrong-doing.''
Governor Tri said the hope was that by exposing the corruption and the misdeeds of the officals and their benefactors, a ''Phuket model'' could be established that could be used in other provinces.
Most of the breaches being investigated are so far in the Patong and Kamala regions where property prices have soared since 2004, leading to ''flying'' land titles of forest land being legitimised.
Hundreds of rai and billions of baht are involved, the Phuket investigators said last week.
Every property developed this decade above the Phuket 80-metre limit is expected to be double-checked.