Nauru says future asylum seekers sent to the island under Australia's so called Pacific Solution will be accommodated in a minimum security residential housing compound.
Hundreds of people have been processed at the two camps on Nauru since Australia first moved asylum seekers there nearly five years ago.
A third camp in a residential setting is now planned and a Nauruan parliamentary delegation recently visited the Baxter Residential Housing Project in Port Augusta in South Australia.
Foreign Minister David Adeang says prison type detention facilities have no future in Nauru, and they want the new camp to accommodate families in a more comfortable environment, such as at Baxter.
"It's essentially residential village type accommodation. Residents of such a facility would be accommodated at high standards. The fence would only be about knee high or so. The standard of care there would be very high as well - as they say, it would Australian standards."