Plans to officially reclassify The Verne Prison in Portland, Dorset, as an immigration removal centre have been put on hold until September.
But the Prison Service said the jail, which is currently empty, will take on immigration detainees from Monday.
The Dorset prison will also remain known as HMP The Verne.
Richard Drax, MP for South Dorset, said the measure would allow for greater flexibility if circumstances changed.
He added that the number of prison spaces available was "fluctuating", but that the site "would still be handed to the Home Office and officially become a detainee centre".
All ordinary prisoners were moved out from The Verne at the end of last year.
'Pressure for places'
The Prison Service said in a statement: "HMP The Verne will begin holding immigration detainees from 24 March 2014.
"Build-up to its total capacity of 580 will be completed by September.
"While build-up takes place and until refurbishment is completed, NOMS [National Offender Management Service] will retain The Verne as a prison, but it will hold exclusively immigration detainees on behalf of the Home Office.
"This temporary arrangement does not affect the number of staff employed by NOMS at The Verne - there are no current plans to review staff levels."
John Hancock, Prison Officers Association committee member for the South West, said staff were told about the change on Tuesday but had not been told how it would affect them.
He said the reason for it remaining a prison could be because of "the pressure on the system for places", giving the Home Office the option to use it as a prison if needed.
Although staff had been given "reassurances" jobs were safe, the changes could probably still mean some staff would be transferred to other sites, he added.
In October the Ministry of Justice (MoJ) said the number of spare places in prisons in England and Wales fell to just over 800.