Six prisons are to close, the Ministry of Justice said, as it unveiled plans to build a so-called super-prison in the North West, London or North Wales.
Some 2,600 offenders are held at the prisons targeted for closure, plus three sites which will be partially shut down.
Prisons at Bullwood Hall in Essex, Canterbury, Gloucester, Kingston in Portsmouth, Shepton Mallet in Somerset and Shrewsbury will close, while Chelmsford, Hull and Isle of Wight will see some accommodation reduced.
A feasibility study on what would be Britain's largest prison in London, the North West or North Wales, holding more than 2,000 prisoners, is also to begin, the Ministry of Justice (MoJ) said.
The programme is part of a drive to build new capacity to replace older prisons and bring down the cost of the prison system. It is expected to save £63 million a year.
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."
The plans for the super-prison appear to contrast with the views of Mr Grayling's predecessor Kenneth Clarke who was an advocate of rehabilitation rather than incarceration.
In addition to the super-prison Mr Grayling unveiled plans for four new mini-prisons known as houseblocks.
It is intended to build these at existing prisons 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.