THE Clarence Valley's new 600-bed jail is to be built in the Pillar Valley.
Minister for Corrections David Elliott has announced a site has been selected on farmland at Lavadia, 12.5km south-east of Grafton and between the Pacific Hwy and Tucabia.
Projects NSW is in discussions regarding the purchase of up to 195 hectares bounded by Avenue Rd to the east, and north-east of the Clarence Valley airport.
The site will be located close to the re-routed Pacific Highway.
The land is zoned RU2, which allows for use as a correctional centre. The project will be designated a state significant development.
Formal exhibition of the Environmental Impact Statement is expected to occur in mid-2016, which would include community and stakeholder consultation.
Construction is likely to take about two years, with the prison ready to take its first inmates late in 2019.
Mr Elliott said the prison will significantly boost the number of jobs and economic opportunities in the Grafton, Clarence Valley and Northern Rivers region.
It is expected to create about 300 jobs during construction and more than 250 ongoing jobs.
"This new modern facility will have latest security and surveillance technology and is a long-term investment in this region," Mr Elliott said.
Member for Clarence Chris Gulaptis said the site was chosen because it offered minimal social and environmental impacts.
"We will hold community information sessions early next year to provide further information and give residents an opportunity to learn more and ask questions," Mr Gulaptis said.
He said he thought residents in the area would "in the main" accept and appreciate the development.
"It provides the opportunity for people throughout the Clarence to work at the new facility," he said.
"There is also an opportunity for other industrial uses to be developed around the site."
The new prison is one of the first projects to be delivered by Projects NSW, which manages priority infrastructure projects.
It will be built and operated as a public-private partnership but owned by the NSW Government.
Meanwhile, the existing Grafton jail's capacity will expand further in coming weeks, after the first prisoners are moved into new purpose-built modular cells at Windsor. The 40 high-grade cells at Outer Metropolitan Multi-Purpose Correctional Centre have been designed and built by Corrective Services Industries to a medium- security specification and will house 80 prisoners.