"Having an education and qualifications would be a powerful tool to steer them away from criminal activity."
Inmates would attend two hours of coaching a week and have eight hours of distance learning.
The minister told a new classroom of women prisoners at the minimum-security jail that ex-inmates were often stigmatised for their crimes and gaining a basic qualification would vastly improve their chances of work.
"You already have a hard time going out to jobs because you've been in prison, so you don't want two black marks beside your name. You've got to get a foot on the ladder."
The Open Polytechnic was investing $4 million in the initiative, and Corrections put in $300,000 of funding allocated in last year's budget.
The initiative was designed to help Corrections reach its Better Public Services target of a 25 per cent reduction in crime by 2017.
If this target was reached, the New Zealand prison population would be cut from 8700 to 8000.