One of Europe's biggest jails, HMP Wandsworth, is among six institutions where governors will be given new powers over budgets and setting the daily regime.
Satellite tracking tags which monitor the movements of offenders using GPS technology will be piloted in eight police areas from September, in a move which could see prisoners become weekend inmates and spend the rest of the week at home as they hold down jobs as they prepare for their release.
Prisons will also be forced to publish statistics on education, reoffending and inmates' employment on release.
The Guardian, outlines how the government will also adopt the findings of a review of education in prisons, which will recommend allowing inmates to use iPads in their cells to "learn independently" and stay in touch with friends and family via Skype.