The mammoth new facility in a suburb of Russian's second city Saint Petersburg will have a capacity to house 4,000 inmates, Gennady Kornienko, head of Russia's prison service, told journalists.
"It will be the most modern prison in Russia and the biggest in Europe," he said.
Europe's current largest prison is believed to be France's Fleury-Merogis Prison on the outskirts of Paris which can hold some 3,800 detainees.
The new Russian facility is due to replace Saint Petersburg's infamous Kresty prison, a red-brick landmark that has housed some of Russia's most high-profile prisoners in its 120-year history.