The new super-prison would help to house in-mates from the planned closure of six prisons announced today.
The Minstry of Justice said a new super-prison will be built in London, North Wales or the North West and could hold more than 2,000 criminals.
The new plan has echoes of Labour’s plan to build three Titan jails of a similar size to modernise the ageing estate.
In addition to the super-prison, the Government also plans for four new mini-prisons known as houseblocks.
These will raise capacity at existing jails at Parc in South Wales, Peterborough in Cambridgeshire, the Mount in Hertfordshire, and Thameside in London. In total they will be able to hold up to 1,260.
The latest plan is part of a drive to build new capacity to replace older prisons and bring down the cost of the prison system with cost savings of more than £60m a year.
The prisons shutting are Bullwood Hall in Essex, Canterbury, Gloucester, Kingston in Portsmouth, Shepton Mallet in Somerset and Shrewsbury.
Justice Secretary Chris Grayling said: “We have to bring down the cost of our prison system, much of which is old and expensive.
“But I never want the Courts to be in a position where they cannot send a criminal to prison because there is no place available. So we have to move as fast as we can to replace the older parts of our prison system.
That’s why we are moving ahead with immediate plans for new prison capacity, as well as closing older and more expensive facilities.”