In its manifesto, launched today, the party says the move would allow Wales "to fully tackle the complex problems of individual and community safety and rehabilitation". It also wants to see the creation of juvenile and women's prisons instead of investment in "Titan" jails.
The announcement follows recent criticism of the current system by the Assembly's Communities and Culture Committee in its report Youth Justice: The Experience of Welsh Children in the Secure Estate. Speaking at the time, committee chair Sandy Mewies said: "The committee doesn't believe Wales should become a soft touch for young offenders, but it does realise they are children first and offenders second.
"The evidence we have heard offers a compelling case for devolving the juvenile secure estate as this will give the Welsh government the power to effect change and tailor its structure more to the needs of Wales."
The move also has the backing of The Howard League for Penal Reform, which says devolving youth justice would help to better protect vulnerable children.
The latest figures on youth crime in Wales, published in the Western Mail, reveal that 7,521 children aged 15 and under were arrested in 2009.
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