Martin Narey, commissioner for correctional services, made the announcement that Liverpool Prison has passed its performance test.
He said: "When I visited Liverpool last month I was delighted with the changes made, not least in education and in the timing of meals and other areas of prisoner treatment. There is no doubt there have been significant improvements.
"Plans will have to become reality as the Service Level Agreement will contain challenging targets and I expect continuous improvements over the next five years.
"Nevertheless this is still a very substantial achievement for Liverpool prison and reflects extremely well on the governor, Cath James, her senior management team, the staff and the Prison Officers' Association."
Under the previous regime prisoners were only allowed out of their cells for a few hours each day.
Showers are available on a daily basis and a unit for new prisoners is currently being built.
Prisoner Brian Howard, 43, from Litherland, is serving 12 months for dealing cannabis. He was sentenced on September 5 and it is his first-time inside.
He said: "The changes were already in place when I came in but obviously being my first time I was worried about what it would be like.
"It certainly is not easy but we are treated like human beings now."
Brian Traynor, of Liverpool Prison Officer's Association, added: "Although I had full confidence in the staff here at Liverpool, it is a testimony that public sector prisons can deliver at the cutting edge and are cost effective."
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