Illawarra man Michael Black, 33, was found with stab wounds just before 12.30pm at the Parklea Correctional Centre in the city’s north west.
Emergency services were called to the facility after reports of an assault and the man was treated by paramedics but died at the scene.
An investigation is now under way to determine the circumstances surrounding the incident.
A jail spokeswoman told the Blacktown Advocate they extended deepest sympathies to the family and friends of the inmate.
“Support is being provided to those impacted,” the spokeswoman said.
“We acknowledge that a full understanding will be achieved only through investigations by NSW Police and the Coroner.
“We will co-operate fully with those investigations.”
The stabbing comes just weeks after a riot involving at least 24 inmates forced the jail into lockdown on April 3.
Several prisoners were injured in the riot.