The controversial preferred site has sparked a community backlash directed at Treasurer and local MP Tim Pallas, with residents protesting against the plan to build the prison less than 500 metres from their homes.

The government has defended its choice of site in Werribee South in Wyndham City. But on Tuesday, Minister for Youth Affairs Jenny Mikakos told Parliament the government was open to other sites, and was conducting consultation about the location.

"It is a genuine consultation process because we have said to the council if they can suggest an alternative location that meets all the selection criteria, then of course we will consider that," she said.

Ms Mikakos said young offenders in detention needed access to their families and the courts. She said the selection criteria for the site included accessibility to health services and transport.

Last month The Age revealed that the government had chosen Werribee South for the high-security youth prison without consulting nearby residents.

The preferred site has also drawn criticism from federal Labor MP Joanne Ryan, whose seat covers Werribee South.

The government said it would build a new facility after inmates rioted and broke free from the Malmsbury youth detention centre last month.

Some of the inmates then allegedly went on a crime spree, including home invasions and car jackings, across the state.

The Parkville youth detention centre has also been plagued by riots and unrest.