The Junee Correctional Centre will soon house an extra 480 maximum security prisoners, increasing its current capacity by about 60 per cent.
At the moment, the facility has 790 beds for medium/minimum security prisoners.
Minister for Counter Terrorism and Corrections, Anthony Roberts, said the upgrade was as much about rehabilitation of inmates as it was about bringing an employment boom to Junee.
"Junee prison is one of the biggest employers in the Riverina and its expansion has led to an additional 130 ongoing jobs in the area and a continuing investment in the region," he said.
Member for Cootamundra Steph Cooke stressed the value in employment for the town given the ongoing drought, saying it had "never been more important".
"At the peak of construction there were between 250-300 tradies working hard on site to ensure the new prison wing was on time and on budget," she said.
The upgrade comes as part of NSW government's $3.8 billion investment in safer communities.
With concerns over the time frame of construction and the $220 million budget of the expansion being exceeded, Ms Cooke assured the community that the predicted figures were met.
"The cost of the upgrade was in the vicinity of $200 million which was not only completed on time, but also on budget," she said.
Mr Roberts, Ms Cooke, Corrective Services NSW Assistant Commissioner Carlo Scasserra and the Junee GEO Correctional Centre general manage Scott Brideoake attended the new wing's opening ceremony on Wednesday, handing over the ceremonial prison keys.
Mr Brideoake said while officially open, it will take time for prisoners to start filling the beds under a 'staggered deployment' of inmates.
"We are looking at having some inmates come through in next few weeks but in mid January we'll really start to bring them into the facility," he said.
"The first lot will come from within the current centre, then it will be up to corrective services as to where we get others from."
The gradual introduction will aim to keep both inmates and staff safe.
The prison expansion would strengthen the facility's focus on inmate rehabilitation, according to Mr Scasserra.
"A dedicated new industries building with bakery, laundry and other operations will ensure inmates are readily employed and learning skills to prepare them for life on the outside," he said.
Mr Brideoake added the expansion was not the only upgrade to take place.
In a first for the corrective service, a 10-bed female transit unit will temporarily house those attending court before moving on to dedicated female prisons.
Mr Brideoake assured the community there was no need to be fearful of the maximum security prisoners.
"I've been in corrective services a number of years and maximum security prisoners are no different to medium or minimums," he said.
"We now have more cameras, more secure fences, video motion detection and also drone detection which is quite new technology able to detect drones as far as 50km away."