THE opening of a new Grafton jail is one of the planks in a major reform of the NSW prison system, says the Minister for Corrections David Elliott.

Mr Elliott has announced a reform that aims to strengthen accountability and help meet the government's commitment to reduce adult re-offending by 5% by 2019.

Performance targets on measures such as out-of-cell hours, participation in rehabilitation activities and security - as well as benchmarked budgets - will be developed and introduced over two years to allow comparisons between all prisons.

In addition to the new prison at Grafton and expanding Parklea, more than 1100 extra beds will support this reform, including 620 modular beds at Cessnock.