The contractor will design and construct a 260-cell extension across two houseblocks at HMP Lowdham Grange - the Category B training prison in Nottinghamshire.

This is the second prison extension contract awarded to Skanska this year, following the award of an extension to HMP Dovegate in January.

This latest award marks the return to HMP Lowdham Grange for Skanska who were responsible for the design and construction of the original 500-place prison between 1995 and 1997, as well as a 128-place extension, completed in 2007.

The contractor will also undertake construction of a 2,900m2, two-storey building to be used for education and vocational training.

In addition to the design and construction of the new facility, Skanska is undertaking the structural and civil design and the mechanical and electrical management and installation for the new buildings.

Capita is lead architect on the scheme, with HBS as M&E consultant and Watermans providing CDM co-ordination.

David Tydeman, executive vice president of Skanska UK said: "Today's announcement is great news. The award of this contract at HMP Lowdham Grange and the award of HMP Dovegate earlier this year reinforce Skanska's commitment to the custodial sector.

"Our experience in developing custodial facilities spans over a decade and is a key part of our overall strategy of being a leading contractor in the construction of essential social and community infrastructure in the UK."

Construction will begin in July 2008 with completion of the main works in early 2010 and the total completion of the scheme set for summer 2010.