Corrections Minister Kelvin Davis says the decision to go for a scaled-back rebuild of Waikeria Prison including a special mental health unit draws a line under decades of poor prison policy.

The 500-bed rebuild of the 100-year-old facility means the previous Government’s plan for an American-style mega-prison is off the table.

Mr Davis says there are still capacity issues that will have to be dealt with by adding extra capacity at other prisons, but the emphasis is now a 15 year plan reduce the prison population by 30 percent.

That includes more rehabilitation and mental health services inside and outside the wire.

"So we’ve got the mental health beds, that's a big change in direction. It's about understanding the needs of the people in prison combined with the $57 million we got in the Budget for housing to assist prisoners, once we get them out into the community, just to support them to make sure they don't go on to re-offend," Mr Davis says.

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