A "secure college" for young offenders will put "education at the heart of custody", the Justice Secretary has said as the first images of the £85 million facility were unveiled.
Chris Grayling said the college, which will house up to 320 young offenders aged between 12 and 17 in Leicestershire, will be a "step change" from the environment of "bars on windows" and provide a major boost to the local economy.
A head teacher or principal will lead a team of educational professionals and offender managers at the secure college, which will feature modern living blocks to accommodate the inmates.
The Ministry of Justice (MoJ) has announced that construction firm Wates will build the facility next to Glen Parva Youth Offenders Institute (YOI) in Leicestershire, with work starting next year ahead of a 2017 opening.
Labour has urged ministers to scrap the proposal from the Criminal Justice and Court Bill, while backbencher John McDonnell claimed the site would be an "Oakwood for children" and risk riots and assaults.
Mr Grayling said: "The development of a secure college is a pioneering approach to tackling the reoffending rates of young people, putting education at the heart of custody.
"This will give them a far better chance of getting out of the criminal justice system, and will mean much better value for money than just continuing to lock up the same young people time and again.
"It's right that young offenders should face appropriate punishment, including custody for the most serious or persistent offences. But the new secure college will be a step change from the traditional environment of bars on windows.
"It will help in our fight to tackle the root cause of offending and give young offenders the skills and self-discipline they need to gain employment or training upon release.
"This project will bring major benefits to the economy and indeed to the local community in the long-term."
The secure college will serve young offenders from the Midlands and the East of England, though offenders from other areas could also be taken.
Wates has committed to ensuring that three quarters of all sub-contractor work will go to local companies within 50 miles of the secure college, the MoJ said
Meanwhile, 70% of all appointments will be to small and medium enterprises (SMEs), it added.
Wates will create 32 apprenticeships and 30 new jobs during construction, as well as 24 work placements for local schoolchildren, the MoJ said.
In 2012/13, 2,780 young people were sentenced to immediate custody. There were 1,271 young people in youth custody in England and Wales at the end of March.
Currently, almost seven in ten young offenders return to crime when they are released, according to the MoJ.
The youth custodial estate currently consists of YOIs, Secure Training Centres and Secure Children's Homes. The average cost of a place in youth custody is around £100,000 per annum.