Magilligan Prison is set to remain open, it has been revealed.
Even though the authorities had considered plans to shut the jail in 2018, it has now emerged Justice Minister David Ford is reassessing the proposal, sources said.
"He is encouraged by the contribution of stakeholders in the North West on how rehabilitation of prisoners is best served at Magilligan," one source added.
This will come as a massive relief to people in neighbouring Limavady, where traders feared the shutdown would deal a blow to the local economy.
Prison officers are to stage a rally at Stormont next Monday in protest against the jail's proposed closure.
The minister consulted on the measure earlier this year. A final decision is expected in the new year. He will make a statement to the Assembly on November 26 about his strategy for the whole Prison Service estate.
Mr Ford told the Assembly: "If I am convinced that locating a prison in the North West is indeed best for Northern Ireland, in terms of rehabilitating offenders, reducing offending and protecting the public, then that will be reflected in my final decision on the future of Magilligan Prison."
The intention was to replace Magilligan with a new prison closer to Belfast. That sparked protest from the Prison Officers' Association.
Finlay Spratt, chairman of the POA in Northern Ireland, has said senior members of the association's national executive committee in London would be attending Monday's rally.
A petition is to be handed to Mr Ford.