The site for a new prison in Northern Tasmania could be known by September.
Corrections Minister Elise Archer said 10 sites were being assessed as part of an "open and transparent process".
She said a new prison was important to relieve pressure on Risdon Prison and also because 46 per cent of the prison population was from northern Tasmania.
"Everything is on track, we are meeting every single deadline," she said.
"We have to identify the best possible site that is close to services and will have the least disruption to neighbours as possible.
"You wouldn't plonk one in the middle of Charles St in Launceston.
Despite intense questioning from northern members of the Upper House at a budget estimates hearing on Wednesday Ms Archer would not be drawn on where the new prison would be located.
The member for Launceston Rosemary Armitage asked if it would "be far out of Launceston"?
Committee chair Tania Rattray wanted to know if the government would choose just one site.
Ms Archer said one site would be selected and there would be wide community consultation.
TasTAFE campus at Risdon Prison
She also announced that a dedicated TasTAFE Campus would soon open at Risdon Prison.
Ms Archer said it would provide better learning pathways for inmates and increase the number of inmates participating in vocational training.
"The campus will run as part of a three-year memorandum of understanding between TasTAFE and the Department of Justice from July 2019, with the full transition planned for 2020," she said.
"TasTAFE teachers will be based at the campus, delivering a range of courses catering for a variety of sentence lengths including full qualifications, short courses and industry-focused qualifications and skill sets.
"This new model builds upon the current training program at Risdon prison, which has engaged more than half of the inmate population over the past three years."
Ms Archer said existing prisoner education and training areas will be refurbished to better reflect a TasTAFE campus and more classroom space will be developed as part of the ongoing redevelopment at the Risdon site.
"A dedicated TasTAFE Campus at Risdon Prison will allow for more focused individual learning plans, higher participation rates and more relevant outcomes that support inmates' reintegration back into the community beyond release," she said.