Plans for a new prison in Port Talbot will be unveiled by Justice Secretary Liz Truss on Wednesday as the UK Government steps up its drive to reform the jail system.
The prison, which will be category C, is expected to be located on land in the Baglan area.
Sites at Full Sutton in Yorkshire, Hindley in Wigan, and Rochester in Kent have also been earmarked for development as part of a pledge to create up to 10,000 modern prison places by 2020.
The announcement is the latest step in a £1.3 billion revamp of the estate first launched under Ms Truss's predecessor, Michael Gove, amid concerns a number of facilities were overcrowded and run-down.
All four proposed sites are on publicly owned land. The Ministry of Justice said final decisions on the new jails would be subject to planning approval, value for money and affordability.
The modernisation drive moved forward earlier this year with the opening of a new prison, HMP Berwyn, in Wrexham. It will hold more than 2,000 inmates.
Ministers are also planning to close the most dilapidated and outdated prison buildings, with a programme of valuation work being carried out to inform further decisions about the estate.
Announcements on further jail closures are expected later in the year.
Stephen Kinnock, MP for Aberavon, says the construction and running of a prison in Port Talbot would bring "much needed" work to the local area.
As part of the announcement on the future of the prison estate, it's been revealed that many Victorian sites will undertake a valuation - including HMP Cardiff.