The unit would hold Abdelbaset Ali Mohmed al-Megrahi and Al Amin Khalifa Fhima if they come to Scotland for trial, according to the city's Evening Times. Scottish legal authorities issued warrants for the men's arrests last year. They are suspects in the investigation into the deaths of 270 people on Pan Am flight 103 after the jet blew up over Lockerbie on 21 December 1988.
According to the newspaper, the special unit is being built under the cover of other work.
Alan Walker, deputy chief executive of the Scottish Prison Service, said: 'I am not prepared to comment on matters of physical security. But you would expect us to take such action as is necessary to ensure we are prepared to meet all contingencies.'
Hopes have been reported to be rising in diplomatic circles that Libya will eventually hand over the two men.
The Government ordered tighter prison security after the escape of Nessan Quinlivan and Pearse McAuley, alleged IRA terrorists, from Brixton prison in south-west London last year.