FACTFILE - Caernarfon
LOCATION: A487, Bangor Road, Caernarfon, Gwynedd
SITE: Former brake-lining factory made famous by a two-and-a-half year industrial dispute
PROPOSAL: Prison for up to 800 inmates
SITE OWNER: Developers Bluefield Caernarfon Ltd
ARGUMENTS FOR: Will being jobs; North Wales has not got a prison and it will ease travel times for inmates' families and solicitors
AGAINST: Possible access difficulties and some environmental issues
A new prison for Wales will be located in Caernarfon, Gwynedd, the Ministry of Justice has decided.
Prisons Minister David Hanson called it an "important announcement for the people of Wales".
The shortlist, announced last August, involved three other locations: Cwmbran, Merthyr Tydfil and Wrexham.
The new jail, to be built on the site of the old Ferodo factory, is designed to address an estimated shortfall of 1,300 prison places in Wales.
"A new prison would help bring considerable economic benefits to this part of Wales as well as providing much needed additional places for us," said Mr Hanson.
Although the site has been selected, the timetable for building the new jail has not yet been determined.
There has been a strong campaign for the prison to be located in north Wales, to make access easier for families and solicitors.
Around 800 adults from the region are estimated at being inmates in jails over in England
The chosen site has more recently been associated with the former Friction Dynamex company, where there was a long-running dispute.
Local MPs and Gwynedd Council had added their support, although there was some local opposition from people worried it would affect tourism.
Gwynedd council leader Councillor Dyfed Edwards called it "excellent news" for the county "at this difficult time for our local economy".
He added: "A prison on this site will provide a huge economic boost for Gwynedd in the medium term and will create hundreds of secure well-paid jobs for local people and an estimated £7m annual boost for the Gwynedd economy.
"It will also consolidate and enhance Caernarfon's status as a regional legal and justice centre."
The North Wales Criminal Justice Board said research found that fears about increases in crime in the vicinity of a prison were unfounded, with evidence showing that people living near a prison were actually safer.
Chairman Ed Beltrami said "There is undoubtedly an urgent need for this prison.
"Currently offenders from North Wales are scattered around 25 different prisons in the UK, as far away as Durham and Kent."
The ministry has said there is a need for a new jail after figures showed there was an overall shortage of prison places in north Wales of around 800, and in the south of 500.
The site owners Bluefield Caernarfon said they recognised "the unique nature of the site and the economic importance of this proposal to the town of the Caernarfon and the surrounding area".
There was disappointment in Merthyr Tydfil, which lost out.
Council leader Jeff Edwards said the authority was "very disappointed...as this would have been seen to have created long term quality sustainable employment".
But Torfaen council leader Bob Wellington, who opposed a prison at an old police training college in Cwmbran called it "fantastic news" and a "common sense" decision.
A local action group opposing the prison had also been set up.
"The hard hours spent negotiating behind the scenes with Ministry of Justice officials has paid dividends," said Mr Wellington.
Wrexham Council's lead member for communities Bob Dutton welcomed the prison for north Wales.
"A prison in the region will bring huge benefits including boosting the construction industry and opportunities for the procurement of goods and services from local companies".