The Minister of State at the Dept of Finance, Tom Parlon, has said the 20-acre site at Mountjoy Prison could be worth up to €2 billion to the State.
Mr Parlon was speaking at the announcement of the Government's intention to seek tenders for the services contract to re-develop the site.
The Office of Public Works is seeking consultants to draw up a plan for the site which will include residential, commercial and retail developments but preserve the brickwork and monuments such as the existing archway to the prison.
The minister said the OPW intended to apply for planning permission on the site before the end of the year.
Meanwhile, the Department of Justice says it is unlikely that part of the site at Mountjoy to be sold off for development will be donated to the Mater Hospital.
The Minister for Justice, Michael McDowell, says the Government is determined to maximise the value of the site in Dublin.
He is considering securing planning permission as well as designing the development before selling the site and he says it is therefore unlikely that any land will be donated to the Mater Hospital.
The Government is proceeding with the plans to redevelop and sell off the Mountjoy jail site and build a new prison for 1,000 inmates in Kilsallaghan despite objections from residents in north Co Dublin.
Mr McDowell insists that recent decisions by Fingal County Council and the listing of the Thornton Hall as a protected structure will not affect the building of the new prison.
