The Government has announced plans for a growing prisoner population including double-bunking for an extra 80 beds at Ngawha in Northland, a new building at Mt Eden to take 245 extra prisoners, and possibly a new 1500-bed prison on the current Waikeria Prison site in Waikato.
Corrections Minister Judith Collins said prison population growth required a further 1800 places.
Work was already underway to add 341 prison places through double-bunking and converting facilities to accommodate more beds.
But another 1800 places were needed which would cost $1 billion.
Collins said a business case for a new Waikeria prison would be considered next week.
It would be operated by Corrections but built and maintained by a public-private partnership which was the same model being used in a new maximum security facility in the grounds of Auckland Prison, at Paremoremo.
She said the proposed double bunking at Northland would be in place by early 2017; the new accommodation block at Mt Eden would be in place by late 2019; and if approved the new Waikeria Prison would get its first prisoners in 2020.
Collins said that despite "significant progress" in reducing crime, the number of prisoners had increased faster than expected.
"This is because the proportion of offenders charged with serious crimes has risen, meaning more people are being remanded in custody and serving more of their sentences in prison.
"We have to respond through new investment or we will create unacceptable safety risks for staff, prisoners and the public, and be less effective at rehabilitating prisoners."
She said the next stage of the prisons programme would also target the drivers of crime, drug and alcohol abuse and domestic violence.
Corrections was proposing an increase to the delivery of rehabilitation programmes, including drug-treatment units, reintegration programmes, education and training programmes, and special treatment units to help address violent and sexual offending.
