Minister for Justice Alan Shatter has said St Patrick's Institution is to be closed and all prisoners and staff will be moved to different institutions within six months.
The move follows a recommendation from the Inspector of Prisons to ensure the safe and secure custody of all prisoners.
The minister said pending the development of new facilities in Oberstown in 2014 this will in the interim involve the transfer of all 17 year olds currently serving a sentence in St Patrick's Institution to a dedicated Unit in Wheatfield Prison.
The 18- to 20-year-old population will also be transferred to Wheatfield.
In his report, the Inspector of Prisons recommended St Patrick's Institution should be closed, prisoners should be dispersed to other institutions where they could be guaranteed safe and secure custody and existing staff should be dispersed to other institutions.
He also recommended that the "name St Patrick's should be consigned to history."
Mr Shatter said the closure could be achieved within six months.
Two wings of St Patrick's Institution will be designated as part of Mountjoy Prison.
One wing will be solely designated as a protection wing. Prisoners will be transferred from Mountjoy.
This relocation of protection prisoners from Mountjoy will also facilitate the completion of the refurbishment works in Mountjoy Prison.
The other wing at St Patricks will be used to accommodate prisoners from Wheatfield who will be transferred from that prison to free up space there for a young offenders' unit.
The minister said once the necessary legislation providing for the closure of St Patrick's is passed, the intention is that the full prison would become part of Mountjoy Male Prison.
Director General of the Prison Service Michael Donnellan said a failure to change the culture within St Patrick's Institution has led to it closure.
Speaking to RTE's News at One programme, Michael Donnellan said the time has come to "bite the bullet, face up to responsibilities and plan for a better alternative."
Mr Donnellan said the general prison system has improved tremendously and so the general prison setting is now a better place to house 18- to 20-year-olds as they are not an easy group to care for.
He said there are now a number of external investigations underway into complaints made against a small cohort of staff members who he says were resposponsible for maintaining the "rigid inflexible culture" within the institution.
He said a closed prison environment is a difficult one to manage.
Homeless charity The Peter McVerry Trust welcomed the announcement.
Peter McVerry Trust CEO Pat Doyle said: "We welcome the closure of St Patrick's Institution, a move that Peter McVerry Trust has long advocated for.
"We do however, have concerns regarding the decision to detain young offenders at Wheatfield prison but note the commitment given by the Minister for Justice Alan Shatter and the Director of the Irish Prison Service Michael Donnellan that this will be a temporary measure."
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