The prison system will run out of beds in February and double-bunking will be essential to manage the crisis, according to Corrections Minister Judith Collins.
Ms Collins has asked the Department of Corrections to speed up the use of converted shipping containers to house inmates.
However, she says putting two beds in a cell will be essential to manage the crisis.
Ms Collins says the containers are a viable and cost-effective option. They could be bought and installed for between $53,000 and $63,000 per bed.