The Board was established under the Prisons Act Amendment Act 1918 as part of the implementation of the new provision for indeterminate sentences. Indeterminate sentences meant that in certain cases fixed sentences were not given by the courts, or sentences were adjusted as appropriate. Under the Act reformatory prisons had to be established and a portion of Fremantle Prison was set aside as a reformatory prison. A reformatory prison was established at Rottnest and later reformatory prisons included Pardelup Prison Farm and Karnet Rehabilitation Centre. The Indeterminate Sentences Board recommended prisoners for transfer to reformatory prisons or for release on probation. The Board consisted of three members and its Annual Report was attached to that of the Comptroller General of Prisons for submission to Parliament.

With the Offenders Probation and Parole Act 1963 the powers, duties and functions of the Board were vested in the Parole Board (see Agency No. 386).