Kier has been named preferred bidder for the £150 million Featherstone prison in Wolverhampton.
The contractor will build a 1,620-place prison as part of the Government’s commitment to expand capacity in England and Wales.
Preparatory work will begin in the summer, with main contract work starting by the end of 2009.
It is currently planned that the prison will be ready for operation in two stages; two house blocks and ancillary facilities in spring 2012, and a third house block in summer 2012.
The prison will be built to category B security standards and will hold both remanded and sentenced adult males.