The DUP's George Robinson tabled an adjournment debate on the proposed closure of Magilligan Prison, on 12 June 2012.
Magilligan, near Londonderry, is Northern Ireland's second largest prison.
The Prison Service plans to replace it with a new medium security jail at a location closer to Belfast in six years' time.
It is part of a 10-year programme of reform that would cost about £240m
Mr Robinson said the extra cost of travel for families would be prohibitive and the loss of jobs would be "devastating for the northwest area" if the prison closed.
He instead urged the justice minister to consider upgrading of the prison.
The Alliance Party's Stephen Farry spoke on behalf of Justice Minister David Ford, who was unable to respond to the debate due to illness.
Mr Farry explained that the prison's single task was to hold low risk men who would soon be returned to the community.
He said Magilligan was not accessible to the families of many inmates and emphasised that the prison's "physical deficiencies have been well documented".
He said moving to a new purpose-built prison would offer an "effective and efficient environment" and would be less expensive than a rebuild of the current building.