The annual report published by the prison watchdog, the Independent Monitoring Board (IMB), described the practice as "simply unacceptable".
Known as Prison Rule 45 - which allows governors to isolate prisoners from the general population - the report expressed "extreme concern" for one inmate who had been separated for 949 days collectively at Wakefield, and at another high-security prison. He was still in isolation at the time the report was published on Monday.
Three other prisoners had served 100, 200 and 300 days under Rule 45.
Police release images of man wanted in connection with serious assault at Wakefield pub
New coffee shop unveiled in old Genesis Barbers building in Ossett
Video footage shows massive blaze in Ferrybridge
Heartless thieves steal £600 watches from Wakefield Hospice charity shop
Angry revenge-porn boyfriend jailed for sending explicit photo of his ex
Segregated prisoners are placed on F-wing, which has 21 cells with an additional eight cells in which prisoners can be monitored under close supervision.
The IMB said there was a lack of evidence of the prison being able to manage prisoners with complex behaviours, such as those with a propensity to commit acts of violence and end up in segregation.
They added that the practice of long-term segregation and the physical environment at HMP Wakefield was more likely than not to induce, rather than prevent, mental ill-health.
The IMB criticised the practice of prisoners being moved from one segregation unit to another at a new high-security prison, referred in the report as Long Term High Security Estates (LTHSE).
It reads: "What we see at Wakefield is a ‘merry-go-round’ of ‘seg-to-seg’ transfers, which appear to be facilitated by informal negotiations between governors.
"This is simply wrong and must cease; transferring problematic prisoners around the LTHSE without a long-term plan is unlikely to provide any meaningful opportunities to tackle the root causes of their behaviour."
In other areas, the report found that through 2020 into 2021, self harming incidents had "significantly increased", with the number of individuals who had self harmed had more than doubled from 72 to 158.
However, they found violent incidents had reduced from 177 to 113.
Overall, they found the prison to be a "safe, orderly and disciplined prison", but due to the violent nature of some inmates, there is an ever-present threat to other prisoners and staff.
They also added that prisoners are, on the whole, treated fairly, aside from the Prison Rule 45 issue, and that their physical health needs are generally met.
There are currently 740 prisoners at the Love Lane prison, including 285 serving life sentences.