Litla-Hraun was an outlying farm from farm Hraun. The prison was built on the property of farm Haeyri in 1919 as a hospital for the whole southern part of Iceland. In 1929, the prison operation took over, and the two properties, Litla and Stora-Hraun were put under its care, where the inmates worked at farming until 1970. Five years later the Agricultural Society of Iceland leased the land for stallion breeding. Since then, the inmates have worked in the metal and concrete work shops. In 1972 a two storey building was added to the east of the old one and in 1980 another one to its west. The latest addition with the tower was inaugurated in 1995, and now the prison can accommodate 87 inmates. Gudjon Samuelsson designed the oldest building, The State Architect Office the next two, and the Architect Office of Finnur and Hilmar the latest one.