Western Australia's 500-bed Bullsbrook quarantine facility was completed in 2022 and has mostly sat idle as the pandemic eased.
Corrective Services Minister Paul Papalia says the site, in Perth's outer northeastern suburbs, could be "a good place for a prison".
"We have massively increased the number of people in our prisons," he told reporters on Tuesday.
"That's resulted in a 38 per cent increase in the prison population in about two and a half years. It's an incredible challenge."
Mr Papalia said the government was considering a range of measures to deal with the problem, including the Bullsbrook Centre for National Resilience.
"It's remote, it's not suitable for rough sleepers ... but it might be suitable for other uses," he said.
The site, which was operated by the WA government until 2023, including for emergency accommodation for bushfire evacuees, is owned by the Commonwealth.
Mr Papalia would not confirm if discussions were underway with the federal government.
The WA Prison Officers Union said the site was not workable.
"The prison system itself is in a terrible state, we've got no beds, we've got no staff, and we need something in a hurry," secretary Andy Smith told 6PR radio.
"But that facility, some time ago, the government was fully aware that it wasn't suitable."
Mr Smith said the site would need major work to upgrade it to a prison. Â
"Our prison system, it needs brick walls ... reinforced concrete," he said.
"To just have something that's designed as accommodation, it would be trashed in a short period of time."
WA Opposition Leader Basil Zempilas last week suggested the Bullsbrook facility could be used as temporary accommodation for homeless people.
But Shelter WA, the state's peak body for housing and homelessness, has toured the facility and said it is not suitable for short or long-term housing.
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