The Youth Justice Board (YJB) said all 58 places at Hassockfield secure training centre, and all 248 young people’s places at Hindley young offender institution (YOI), near Wigan, will be vacated by the end of March 2015.
Lucy Dawes, deputy chief executive at the YJB, said the decisions were a result of "careful consideration of factors such as the current alignment between supply of, and demand for, custodial places".
She said the decision was "in no way" a comment on the performance and commitment of staff at the establishments.
She added that individual placement plans for all young people at Hassockfield and Hindley would be created.
"The aim of every relocation plan is to keep to a minimum the effect of the transfer on the welfare of young people," she said.
An inspection of Hindley, which was published in August, found that it was still struggling to overcome problems around bullying and violence that contributed to the suicide of a 17-year-old inmate three years ago.
Figures published earlier this month showed that in August there were 1,068 under-18s in custody, a reduction of around 2,000 since 2008.
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