It is the first prison in North Wales and will house 2,000 inmates. It is being built on the former Firestone factory site in Wrexham.
Prisons minister Andrew Selous added: “Preparatory work has already started on site ahead of schedule and main construction will begin shortly.
Wales Office minister Alun Cairns said: “North Wales has long needed its own prison and this final approval is very welcome. This development, through its construction, running and maintenance, will bring a huge number of jobs to Wrexham and the surrounding region and give a great economic boost to north Wales’ economy.”
“We remain in no doubt that the prison will be a huge benefit to the region. Once operational it is estimated that the prison will create about 1,000 jobs and boost the local economy by about £23m per year.”