The territory also has the highest rates of recidivist and unsentenced prisoners, according to new Australian Bureau of Statistics figures that detail prison populations across the country between 2008 and 2018.

The number of people locked up in Canberra's only prison ballooned from 247 to 492 during the 10-year period in an increase of 99.19 per cent. The Northern Territory had the next greatest increase at 84.86 per cent.

The new data provides a comprehensive snapshot of the people banged up on June 30 in each of the past 10 years, revealing a key factor in Canberra's burgeoning prison population is that most of the people inside are returning after being released.

Of the 492 people incarcerated in Canberra at the end of 2017-18, 369 - 75 per cent - were in at least their second stint behind bars.

While the majority of prisoners in every Australian jurisdiction have been locked up before, the ACT's proportion of recidivist inmates was the country's highest and comfortably ahead of the national average of 57 per cent.

Rather than expand the Alexander Maconochie Centre's main campus to accommodate growing numbers of prisoners in the capital, Mr Rattenbury believes the answer is to keep fewer people behind bars.

In February, the corrections minister redirected $14.5 million away from prison expansion and into community programs as part of an initiative dubbed "Building Communities Not Prisons".

Mr Rattenbury said this would be much more cost-effective than a large-scale expansion of the prison, which would have cost more than $200 million.

As part of the new initiative, up to 80 men classified as low-risk prisoners will be housed beyond the high-security double fence at the prison to ease pressure on the facility and better prepare them for reintroduction to life on the outside, effectively increasing the prison's capacity to 591.

Along with the $997,000 allocated to the prison's "reintegration centre", the ACT government will invest $6.8 million to establish a service that provides stable accommodation for people on bail or parole who would otherwise have to be kept in custody.

This would go some way towards addressing another issue identified in the newly released figures, which show the ACT has the highest proportion of unsentenced prisoners in the country.

At the end of the last financial year, 37.8 per cent of the people behind bars in Canberra had not been sentenced.

The government has also committed $3.6 million to the ACT's first justice reinvestment trial, Yarrabi Bammir, $1.6 million for the Strong Connected Neighbourhoods program, and $1.5 million for Victim Support ACT.

"With prison rates on the increase, we cannot - in good conscience - maintain the status quo," Mr Rattenbury said in announcing the initiative. "Justice reinvestment signals a better way to help keep more people out of the prison system, and to help keep our community safe."