NSW minister axes site for new mega jail

A controversial plan to build Australia's largest jail in Sydney's southwest has been axed.

The proposed 5000-inmate prison in Wollondilly was set to replace Long Bay Jail, which sits on a prime real estate site on the city's eastern beaches and the NSW government is hoping to sell.

But NSW Corrections Minister David Elliott on Tuesday confirmed that plan is now being abandoned.

"Having consulted Corrective Services NSW and local stakeholders I have ruled out Wollondilly as a potential site for Long Bay jail's replacement," he said.

The result comes after the Liberal member for Wollondilly Jai Rowell heavily lobbied Premier Mike Baird to shelve the proposal, arguing he would not allow the area to become "a dumping ground for Sydney's criminals".

Mr Elliott remains tight-lipped about the potential location of alternative sites.

"Corrective Services NSW will continue to work with planning and councils on possible locations for the new jail," he said.

The setback comes just months after Mr Elliott shelved plans to reopen Parramatta Jail to help ease the state's bulging prison population and overcrowding issues.

NSW Bureau of Crime Statistics and Research director Don Weatherburn in May revealed inmate numbers had reached a record high of more than 12,000 over the past two years and were showing no signs of slowing.