A six-figure contract has been awarded to services consultancy Newell & Budge to design and develop the new system, which is due to go live in the second quarter of next year.
Scottish Prison Service project manager Alan Gray explained that the government's Prince 2 project management process will play a major part.
"Under Prince 2 we have a project management structure based on specific stages," he said.
The project will replace the existing seven-year-old system with a new version better suited to end-users' needs, Gray said. "It is a Windows-based interface which is a lot more intuitive and flexible for users."
In addition to custody details on the 6,000 prisoners in Scotland, the system also provides a record of activities carried out in prison. Officials say the system, which covers 18 Scottish Prison Service sites, will be accessed by about 3,500 staff.
The new system will also use XML internet technology to integrate with other government systems, such as the Scottish Criminal Records Office and the General Practitioners' Administration System.