Subject to planning approval, new prisons will be built at Full Sutton near York and Port Talbot in South Wales. Existing prisons at Hindley in Wigan and Rochester in Kent will be closed and substantially rebuilt.
Together, the four new prisons will have capacity for 5,000 offenders.
Justice secretary Elizabeth Truss said: “We cannot hope to reduce reoffending until we build prisons that are places of reform where hard work and self-improvement flourish. Outdated prisons, with dark corridors and cramped conditions, will not help offenders turn their back on crime – nor do they provide our professional and dedicated prison officers with the right tools or environment to do their job effectively.
“This significant building programme will not only help create a modern prison estate where wholescale reform can truly take root, but will also provide a thriving, economic lifeline for the local community – creating hundreds of jobs for local people and maximising opportunities for businesses.”