The Ministry of Justice has announced the closure of Dorchester Prison.
It is part of the Government's prison modernisation programme to replace old and outdated estates.
A planned new 2,000 place prison will be built in Wrexham.
A feasibility study has started on a second large prison to be constructed in the South East of England.
HMP The Verne on Portland is to close as a prison and be converted into an immigration removal centre.
It will provide around 600 additional places to hold immigration detainees awaiting removal from the country.
Seven jails in the South West could be turned into 'settlement' prisons, and would see the majority of offenders released from prisons in, or close to, the area in which they live.
Home Office Minister Damian Green has spoken to ITV News West Country:
Seven jails in the South West are included in proposals to become 'resettlement prisons'.
The plans, which are being revealed by the Justice Secretary Chris Grayling on Thursday, will see the majority of offenders released from prisons in, or close to, the area in which they live.
- Leyhill in Gloucestershire
- Channings Wood in Newton Abbot
- Guys Marsh in Dorset