HMP Liverpool is set to be refurbished and expanded to create around 350 more prison places.
Also known as Walton Prison, the facility is part of a government expansion and refurbishment programme aimed at creating 4,000 new prison places across the country.
Making the announcement today, Deputy Prime Minister and Justice Secretary Dominic Raab said: "Our prison-building programme will deliver an extra 20,000 prison places by the mid-2020s to punish offenders, deter crime and protect the public.