Fearing that the staff might bring compensation claims, smoking will now be prohibited in all prisons in Wales and England.
A pilot scheme is set to be launched early next year banning all tobacco products in the grounds of jails in south-west England, with a full ban due to be rolled out within 12 months.
Senior prison staff were informed of the move in a letter.
Prisoners are due to be offered nicotine patches as a way of dealing with withdrawal symptoms, which it is feared may lead some inmates to violence.
"I am not sure it is the right time," a prison source told the paper. "Everything in jails is extremely stretched and more job losses are coming."
Prison Service staff have campaigned for a ban and authorities are worried that officers could bring compensation claims over the effects of passive smoking.