Women's prisons should be shut down and replaced with small secure units, according to a report commissioned for the Home Office.
The deaths of six inmates at Styal prompted the report
The plan is being recommended by Labour peer Baroness Corston as part of a 10-year reform programme.
She says women should be held in units near their families and not in large jails like the one in Holloway, London.
Her review was prompted by the deaths of six women at Styal prison, Cheshire, between August 2002 and August 2003.
If adopted by the home secretary, Baroness Corston's approach would see Holloway and about 14 other all-female prisons in England and Wales shut down or converted into jails for men.
Lady Corston recommends a significant cut in the overall number of women who are sent to jail, with greater use of community punishments instead.
There are currently 4,300 women in jail in England and Wales.
Frances Crook, director of the Howard League for Penal Reform, said "prison simply doesn't work" for women.
"From lack of staff training and inadequate healthcare, to questionable policies such as segregating women at risk and the over-use of force, the systemic failings of imprisonment that the Corston Review highlights must be addressed by the government.
"If the Government fails to take radical action it will be held accountable for the deaths and injuries of women in prisons for years to come."
Last year, three women committed suicide in prisons, following four in 2005 and 13 in 2004.
So far in 2007 there have been two apparently self-inflicted deaths.
Baroness Corston said government departments had to work together to prevent women's needs being overlooked.
"The tragic deaths of two female prisoners in January this year highlight that although there have been significant improvements since the series of six deaths at Styal, a radical new approach is needed in regard to the management of women offenders and more widely, women at risk of offending."
'Champion in government'
The report makes 43 recommendations, including improved jail sanitation and a ban on strip-searching of women inmates.
There should be a specific "champion" within government to oversee policy on women offenders and a network of community centres to which police and other agencies can refer women who commit crime or are likely to in the future, it says.
Home Office Minister Baroness Scotland said she welcomed the review and promised the government would look carefully at the issues it raised.
"Vulnerable women who are not a danger to society should not be going to prison," she said.
"Where women have to be imprisoned, we are committed to ensuring they are held in conditions that are clean, decent and fit for purpose."
The report was also described as "a profound shift" by a coalition of 16 criminal justice charities.