Minister of State Tom Parlon has estimated that the sale of the Mountjoy Prison site in Dublin's north inner city could be worth up to €2 billion to the State.
The Government plans to sell off the jail and use the money to fund a new prison complex housing 1,000 inmates at Thornton, north Co Dublin.
With tenders being sought for redevelopment of the 20 acre site, Mr Parlon, who is junior minister with responsibility for the Office of Public Works, said today it could be one of the most lucrative property deals in the history of the State.
"It could be worth anything between €10 million an acre and €100 million," he said. "In today's prices it is very difficult to quantify how much the land could be worth. We are also talking about a deal in two years time."
The site, which skirts the Royal Canal, is being compared to two highly sought after plots of land on the south-side near Lansdowne Road. Property developer Sean Dunne paid over €50 million an acre in November for just under five acres of land in Ballsbridge, Dublin 4.
A month later, the adjoining two-acres of the former UCD veterinary college was sold by the OPW for €171 million in a deal that worked out at over €84 million an acre.
The Irish Prisons Service said today there are no plans to give part of the Mountjoy Prison site to the Mater Hospital and that the entire campus is going to be sold. A tender for architectural and other services was placed last night in the European Journal.
The plan to develop the site seeks to preserve brickwork and monuments such as the archway at the entrance to the prison. Would-be developers will also have to deal with removing the bodies of up to 40 prisoners buried on the site.
In seeking to achieve maximum value for the site, the Department of Justice may commission a design for the redevelopment and seek planning permission.
Mr Parlon said the Government intended to seek tenders for the services contract to re-develop the site.
"The Mountjoy Prison Complex in Dublin's North inner city is a location of great cultural and historic importance both to the capital and the country as a whole," he said.
"On behalf of the Department of Justice, Equality and Law Reform the Commissioners of Public Works are now charged with creating a new role for the prison site which contributes to the regeneration of that part of Dublin while respecting and enhancing the site's important historic and cultural characteristics."
The Labour Party spokesman on justice Joe Costello criticised the Government for not offering any of the site to the Mater Hospital.
Mr Costello said: "There is a crying need for additional space to allow the proposed development of the Mater Hospital to go ahead.
Apart from the planned new A&E Department, space is also urgently needed to allow for the provision of a new children's hospital to replace Temple St, a project that has been promised for almost ten years, he said.
"The Mountjoy site is directly across the road from the Mater and would offer an ideal solution to their space problem without costing the state anything in real terms. It is also not unreasonable, if Mountjoy is to close, that the local community should benefit in some way.