Upper Hutt locals are concerned at a Rimutaka Prison plan to host up to 11 ex-convicts on the prison grounds.
Many of the people expected to pass through the self-care unit, known as Te Korowai, will have convictions for sexual offending against children.
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They will be subject to strict conditions including GPS monitoring, regular meetings with probation staff and restrictions on living and working arrangements.
The Department of Corrections gave information to 40 early childcare centres about the move and sent a fact sheet to 21 Upper Hutt Schools earlier this week.
Corrections operations director Matire Kupenga-Wanoa said it was a significant challenge to find suitable accommodation for child sex offenders who should not legally remain in prison.
"Placing child sex offenders on prison land, outside the wire, is our final option for housing these offenders," he said in a statement.
"The reality is that without accommodation, they would be homeless, which would present an unacceptable safety risk to communities."
Mike Williams, head of penal reform organisation the Howard League, told Newshub he thought the new village was a solution to a complex problem.
"You have to do something with them and people object to having former sex offenders in their community, so that is one way of accommodating these people."
But parents at St Brendan's in Heretaunga, which is 1.7km away from the prison, were not fussed on the idea.
"I do have concerns they are close to two schools... and can probably freely walk out of the prison and in 10 minutes they're at two schools," one parent told RNZ.
"Going on past history there's definitely been some concerns about whether they can monitor them properly and I do have concerns about that," another said.
Another school, Hutt International Boys School, is 1.5km from the prison.
Newshub.
