Her Majesty's Penitentiary in St. John's, built in 1859, is an aging structure that doesn't meet today's needs.
The building has faced years of disrepair.
Prior to the last provincial election, a $200 million replacement was pledged to replace the facility.
The new facility is expected to be a private-public partnership and will be built near the RCMP provincial headquarters in the White Hills area.
Construction is expected to begin in 2022 and the new facility will house twice the number of inmates as Her Majesty's Penitentiary.