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The Milburn facility has signed a memorandum of understanding with Otago charity ReStore to provide furniture and toys for sale in its charity shop in Vogel St.
The store is operated by the Malcam Trust and Habitat for Humanity.
The products would be produced at the prison by prisoners in carpentry and joinery trade training.
"This is a great partnership for the prison and an extremely useful addition to our existing programme and ongoing relationship with the trust," assistant prison director Gill Brown said.
"Trade training is all about prisoners learning employable skills and gaining meaningful qualifications that lead to employment opportunities on release.
"Employment is shown to be a key factor in people maintaining a crime-free life.
"This initiative with ReStore enables the men to create quality products using wide-ranging real-world skills to benefit the community. Its a win-win-win."
The trust and the prison had a long-standing partnership, which included the delivery of a drama programme at OCF.
ReStore chairman Malcolm Cameron said he was pleased to be working with the prison.
"We are thrilled to be working with the prison and prisoners responsible for the production of these fantastic products, which are being sold at our ReStore site," he said.
The community’s response to the products had been great with the first items "snatched up" by a local preschool shortly after they were offered on the store’s Facebook page.
"The men enjoy knowing that the toys and furniture they have made are going to benefit people in need in the local community," Ms Brown said.
"Many of the men know what it is like to be at the receiving end of community support, and many of them have families who are receiving community support from the Malcam Trust and like agencies now.
"They are justifiably very proud of their achievements and the products they are creating. This partnership adds further meaning and purpose to their training."