He said today that the new prison will house 800 inmates and will cost about £215m to build.
In addition, another £70m will be spent on providing a further 400 extra places at both Magilligan and Lisburn's Maghaberry prisons.
Even that won't be enough as the Government forecasts that the prison population here could be as high as 2,700 by 2022.
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Commenting, Mr Goggins said it may therefore be necessary to build a third adult male prison in Northern Ireland in the future.
The facts are stark. Seven years ago, following the early prisoner releases under the Good Friday Agreement, there were fewer than 900 prisoners in Northern Ireland.
But recently, the figure was just over 1,500 and that is expected to rise to more than 1,600 within two years – and hit the predicted 2,700 within 15 years.
"The plans I have announced today will meet the immediate need for extra prison places and will see a brand new prison built on the site of the existing Magilligan Prison," he said.
Although the location of the jail is not the government's ideal choice, it is what it can afford.
The existing jail on the site was built in 1972 and the accommodation consists of a combination of H-blocks, WWII Nissan huts and portable huts.
Its remote location means access is a problem. The site is 71 miles from Belfast, where a majority of prisoners in Northern Ireland come from.
(BMcC)
