The First Minister visited the site in July where it is estimated that around 1,000 jobs will be created through construction and work of the prison.
The First Minister said: "The announcement is a big boost for Wrexham and all of North Wales and will bring far reaching benefits to the region.
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"The new prison will create jobs and become a significant contributor to the Welsh economy.
"The current arrangements whereby prisoners from North Wales have to serve their sentences in England are far from ideal. Not only does this mean that the relevant Welsh language provision is not in place for prisoners for whom Welsh is their first language, but their families have to travel great distances to visit them. This is not conducive to effective rehabilitation.
"The Welsh Government has long supported seeing a prison built in North Wales and I am very pleased that the benefits of having a prison in Wrexham have been recognised by the UK Government."
(CD/MH)
