Green’s Dictionary of Slang

(Aus. prison) having two prisoners sharing a cell.

1984		B. Ellem Doing Time app. C 244: I think they believe that if you’re one out by yourself all the time, you’re a psychopath. If you’re two out then you’ve got to be fucking one another.
1990		Tupper & Wortley Aus. Prison Sl. Gloss. 🌐 Two out. To share a cell with another inmate. As in ‘to be two out.’.
2006		B. Matthews Intractable [ebook] He arranged to have a double bunk put into his cell and we went two-out.