Network Survivability is a critical issue in telecommunications network due to increasing dependence of the society on communication systems. Fast restoration from a network failure is an important challenge that deserves attention. This thesis addresses an optimal link capacity design problem for survivable asynchronous transfer mode (ATM) network based on the link restoration strategy. Given a projected traffic demands and the network topology, capacity and flow assignment are jointly optimized to yield the optimal capacity placement. The problem is formulated as large-scale nonlinear programming and is solved using a specific type of Lagrange method (so called Separable Augmented Lagrangian Algorithm or SALA for short). Several networks with diverse topological characteristics are used in the experiments to validate our proposed novel model, using capacity installation cost, routing cost, total network cost, used capacity and required CPU time, as performance metrics. Link restoration strategy is compared against global reconfiguration strategy using these performance metrics.