The UK Justice Secretary, Chris Grayling, says the prison which will be built in north Wales will be 'Britain's biggest'.
He says the announcement is a very important part of upgrading Britain's prisons.
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The two projects going head-to-head today are: For the Young at Heart and Y Gwndwn.
David and Angela Southwood, from Newport, say they plan to live in a caravan over the border after learning of the decision.