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A £250 million super-prison that could hold up to 2,000 inmates is to be built in the region.
Justice Secretary Chris Grayling said the new jail is expected to bring around £23 million a year to the regional economy and create around 1,000 jobs.
The exact location has yet to be confirmed.
Mr Grayling first mooted plans for a super-prison in January as he announced a raft of prison closures covering some 2,600 inmate places.
Chief secretary to the Treasury Danny Alexander confirmed to the House of Commons that £100 million would be invested in the construction of the prison in 2015/2016 as part of a multi-billion investment programme. It will ultimately receive £250 million of investment from the Government.
Mr Grayling said: "My priority is to provide enough prison places for those sent there by the courts - and to do so in a way that gives taxpayers the best possible value for money.
"This will be the first prison in North Wales and a massive boost to the Welsh economy. It will provide around 1,000 much-needed jobs, great opportunities for local businesses and millions of pounds worth of construction opportunities.
"It will also allow offenders from the region to be held closer to their homes, which we know helps prevent reoffending.
"Across the country I am reducing the cost of prison by replacing old, inefficient buildings with newer accommodation that is cheaper to run. This new prison allows us to continue this work while providing a significant and rapid investment in the Welsh economy.''