Lend Lease has won a £151m prison construction contract in Wrexham from the Ministry of Justice.
The new 2,100-place prison will be the first for North Wales and forms part of the government's ongoing modernisation plans for the prison estate.
Work has already started on the site, which was previously the Firestone Tyre factory, and the prison will be fully operational by late 2017.
Lend Lease beat Carillion, Interserve and Kier to the project.
The £151m contract alongside other expenses means that the overall project spend is set to be £212m.
The MoJ said that the proposals include approximately £50m to be spent with small and medium enterprises. The project is also committed to recruiting 50% of the entire workforce from the local area, including around 100 apprenticeships.
Jeremy Wright, prisons minister, said: "We knew that a new prison in Wales was going to be a massive boost to the Welsh economy, and it's great that local people are going to benefit from it.
"This contract will ensure that millions of pounds are spent with SMEs, with significant levels of work for local businesses and young people – a key part of this Government's long-term plan to build a stronger economy."