Individuals subject to a public protection order will be housed in a residence separate from the main prison, Corrections' website said. The dwelling would have its own secure perimeter fence.
Staff working at the residence would not be Corrections officers. Conditions within the residence would be monitored by independent inspectors and the Ombudsman.
Corrections national commissioner Jeremy Lightfoot today confirmed this was the first application of its kind and said if the court granted it, Wilson would be held on the grounds of Christchurch Men's Prison.
"PPOs give Corrections an added level of monitoring for the most high-risk offenders," Mr Lightfoot said.
"These offenders have served their prison sentence and still pose a very high risk of imminent and serious sexual or violent offending."
Wilson was released on parole on June 27, 2001, to live in a small North Island town. Eleven days later, he raped a 13-year-old girl.
Her younger brother, who saw part of the attack, identified Wilson, whom they knew as "Rat".
When Wilson learned the girl's father wanted to confront him, he launched a pre-emptive attack and hit the man with a rake so hard the handle broke.
A jury in the High Court at Hamilton found Wilson guilty of rape, indecent assault, injuring with intent to injure and assault with a weapon.
He was originally sentenced to preventive detention -- an indefinite prison term -- but that was quashed on appeal.
If the new High Court application is successful, Wilson will have a management plan that will set out any restrictions, as well as any identified needs and goals that could contribute to his potential release.
According to Corrections, he would not be able to leave his residence except under escort and supervision for medical care and other approved absences such as court appearances.
Public protections orders will be re-evaluated annually, and Wilson could seek a court review of his detention at any time.
If he is deemed eligible for release, he would be placed on a protective supervision order, which would mean he would be subject to intensive monitoring in the community.
The case will be back before the High Court later this month.