Customary landowners in Vanuatu and the government have signed an agreement which will now allow a New Zealand-funded prison to be built.
The corrections facility is to be constructed about six kilometres from the capital, Port Vila, and replace jails dating back to the colonial days of early last century.
A representative of the landowners has spoken in support of the project, saying he agrees to provide land for the centre because it is important that inmates get a second chance to return home as useful citizens.
The prime minister, Edward Natapei, praised the patience of the New Zealand government to wait for four years until the Vanuatu government was ready with the project.
In the next few weeks, the Vanuatu public works department is going to start building a road to the proposed site before the building of the centre can start.