More than 80 inmates at HMP Isle of Wight have been sold the birds at the discretion of prison governors for just £5 each.
The prisoners, most of whom are serving life imprisonment, are given the pets after they are bred in the prison’s own aviary, based on the Albany wing.
Lags are responsible for the care of their bird, including feeding and cleaning, and face being charged with an offence against prison discipline if they don’t.
The Ministry of Justice says prison governors have the discretion to allow inmates to keep a small bird in their cell but according to the Prison Reform Trust, not many prisons allow it.
The MOJ says allowing prisoners to have birds in their cells 'engenders a sense of responsibility as well as providing an interest, particularly for those serving long sentences'.
A Freedom of Information request revealed 81 prisoners have pet birds at Isle of Wight - of these 63 have one bird and 18 have two.
The type of bird is not always recorded but it appears there are currently 97 budgies, one canary and one parrot.
The pets are allowed to be kept under the Incentives and Earned Privileges scheme, which is designed to encourage responsible behaviour.
Privileges are earned by prisoners through good behaviour and performance and removed if they fail to maintain acceptable standards.
An MOJ statement said: 'Many of these prisoners take great pride and comfort in their birds.
'Prisoners are allowed to have sufficient property in possession to lead as normal and individual an existence as possible within the constraints of the prison environment.
'Every prison governor assesses the needs of their population and compiles a facility list which they consider appropriate for their local circumstances.
'Prison governors have the discretion to allow prisoners to keep a small bird in their cell. Other pets are not permitted.
'A prisoner who fails to care for a bird properly would be liable to be charged with an offence and the bird would also be removed and re-homed with another prisoner.'
Glyn Travis, spokesman for Professional Trades Union for Prison, Correctional and Secure Psychiatric Workers, said: 'Looking after birds gives prisoners something to focus on.
'There are some people that feel prisoners shouldn’t have any comforts, but we try and give them access to a reasonable lifestyle.
'I have seen some very nervous people, such as victims of sex abuse, become much more confident because of the responsibilities they have learnt looking after their birds.'