The present invention discloses an oral drug delivery system in tablet form, which acts like an osmotic pump. The system consists of a central drug core of acyclovir (drug in nano form) and an osmotic agent (sodium chloride) and can be formulated in capsule or tablet form. Capsule formation method involves formation of asymmetric polymeric membrane, while tablets are made by using self nano emulsifying agents. When the system, either in tablet or capsule form comes into contact with body fluids, after being taken orally from the mouth, it gets ˜activated™ and swells due to the inflow of water. The inflow of water solubilizes the drug and causes it to leach out slowly and continuously from the tiny holes in the film. Use of drug in nanoform results in better solubility (8.76 mcg/ml vs 3.992 mcg/ml) and thus enhanced bio-availability.