Inmates could be housed in temporary cabins currently being installed at the Isle of Man prison - as the jail is running close to full capacity.
There has been a significant increase in the prison population over the last 12 months, rising from 90 in April last year to a current figure of 134.
The influx is attributed to a police crackdown on the importation and supply of drugs. There has been an average of 33 new inmates per quarter.
A recent undercover operation codenamed Nightjar, which targeted drug dealing in the island's night-time economy, has resulted in a large number of suspects being charged.
Sentencing is due to take place over several days in June.
The prison has an operational capacity of 141 cells but in practice the figure is lower as male, female, vulnerable and remand prisoners are housed in separate wings.
Even on the main wings, male prisoners may need to be separated to reduce the risk of violence due to conflicts between them.
A temporary housing unit, comprising 24 cabins, is currently being installed and nearing completion but is not yet ready for occupancy.
A spokesperson for the Department of Home Affairs said: 'Since March Tynwald the prison has progressed with preparations to ensure they have suitable capacity, by creating a temporary accommodation unit within a secure area of the grounds.
'The unit consists of 24 single occupancy cabins, of a similar size to the standard prison cells.
‘The unit will only be populated as required, by prisoners that meet a strict criteria and risk assessment.
'The cabins will be subject to all the same security measures as the main prison.'
The spokesperson said the situation is being monitored, and the prison is considering a range of other options to ensure it continues to operate safely and effectively while demand increases.
Justice and Home Affairs Minister Jane Poole-Wilson was questioned in Tynwald in March this year about the pressures on prison capacity.
She pointed out that the prison population can fluctuate on a day-to-day basis and where appropriate, and subject to proper risk assessment, it is possible to release certain offenders early.
But she said: ‘I must emphasise that any consideration of early release would only be for absolute lower-level offenders.
‘That there are strict prohibitions around offenders who are violent or guilty of sexual violence.’
Asked whether inmates with UK links could be transferred across, she replied: ‘The prison population in the UK is currently at severe strain to the extent that prisoners are now being detained in police custody suites.
‘So our difficulty is whether or not the UK prisons have any capacity to take anybody, But it is a matter that we will keep under review.’