David Ford will announce today that a prison will remain at the site of HMP Magilligan.
The Justice Minister’s announcement is being viewed as a victory for campaigners who wanted to retain the facility —a major employer.
There had been fears that all prison services would be concentrated within a 12-mile radius of Belfast.
While most prisoners at Magilligan are from greater Belfast, almost all of the 450 staff are from the North West.
The loss of their salaries to the local economy was estimated by Roe Valley Chamber of Commerce to be some £10m annually.
The Justice Minister's announcement will reveal if 40-year-old Magilligan is to be renovated or rebuilt.
The retention of Magilligan has cross-community and cross- party support.
East Londonderry MP Gregory Campbell had thrown his weight behind the campaign by prison staff to keep the facility, arguing that there was no logical reason to relocate.
He said: “The department already owns the land at Magilligan so the cost of purchasing a new site to house the 450 prisoners is not necessary. Added to that, the department would save an estimated £10m keeping the staff at Magilligan.
“All this would have to be paid for out of a budget the mnister simply does not have which was the real elephant in the room.
“The minister just does not have the estimated £130m needed to build a new prison in Belfast so rebuilding the facility at Magilligan was the cheaper option.
“What I will now be pressing for is a timeline for when the building will begin which as far as I understand will be phased.”
The SDLP's John Dallat said: “The loss of this facility would have been extremely detrimental to the local economy, difficult to justify and would have made a mockery of the Executive's policy of decentralisation.”