William K. Marshall III, the director of the Bureau of Prisons, told staff Tuesday that the agency is suspending operations at the Federal Correctional Institution, Terminal Island, a low-security prison.
It currently houses nearly 1,000 inmates, including cryptocurrency fraudster Sam Bankman-Fried and disgraced celebrity lawyer Michael Avenatti.
While operations are being suspended, it's unclear where the inmates will be held or transferred.
"Several placement options are being evaluated, with a priority on keeping individuals as close as possible to their anticipated release locations," the Bureau of Prisons said in a statement.
The decision to close the facility, at least temporarily, "is not easy, but is absolutely necessary," Marshall wrote, calling it a matter of "safety, common sense, and doing what is right for the people who work and live inside that institution."
Marshall cited problems with underground tunnels containing the facility's steam heating system. Ceilings in the tunnels have begun to deteriorate, causing chunks of concrete to fall and putting employees and the heating system at risk, he said.
"We are not going to wait for a crisis," Marshall told employees. "We are not going to gamble with lives. And we are not going to expect people to work or live in conditions that we would never accept for ourselves."
Marshall's statement added, "In the coming days and weeks, we will communicate the next steps, relocation timelines, and support for both staff and inmates."
Last year, an assessment revealed the facility needs $110 million worth of repairs over the next 20 years - raising questions about whether they will ever move inmates back to this facility. The facility opened in the 1930s.
The Associated Press contributed to this report.