Discussions about whether the proposed Waikeria mega prison will go ahead are taking longer than expected.
Justice Minister Andrew Little said the government was considering a range of other options, including smaller prisons closer to communities.
"We've got this target of reducing the prison population by 30 percent, including a massive reduction in our Māori imprisonment rate against the immediate short term pressure we've got."
"The prison population is growing. We've got more and more prisoners being double bunked in, frankly, increasingly unsafe prison environments," Mr Little said.
The government was previously urged to scrap the mega prison idea.