This article presents a system dynamics model of sustainable development for the local government of the Kuldiga District in the Kurzeme Region, Latvia. Latvia aspires to the principles of sustainable development, which have been included in the Law of Regional Development and in the Latvia's Sustainable Development Strategy 2030. Although Latvia aspires to the principles of sustainable development, there is a relatively small number of theoretical studies and practical results in the area of simulation modelling of sustainable development. Therefore, the proposed model presents a novel approach in the context of spatial and regional planning in Latvia. The goal of the proposed modelling framework is to provide a technical decision support tool for stakeholders and decision-makers in territorial management planning, allowing to evaluate alternative development scenarios and planning options. The hypothesis of the research is that the quality of life and sustainability are the primary goals and criteria of sustainable development. The modelling framework is based on an overall concept of sustainable development as an unending process defined neither by fixed goals nor by specific means of achieving them. The modelling framework is considered as an invaluable tool in assisting decision-makers in sustainable development planning, as well as an educational means in understanding how various regional sub-systems function.