Freedom of choice has been defined as the opportunity to choose alternative plans of action. In this fMRI study, we investigated how the perceived freedom of choice and the underlying neural correlates are influenced by the availability of options. Participants made an initial free choice between left or right doors before beginning a virtual walk along a corridor. At the mid-point of the corridor, lock cues appeared to reveal whether one or both doors remained available, requiring participants either to select a particular door or allowing them to freely choose to stay or switch their choice. We found that participants rated trials as free when they were able to carry out their initial choice, but even more so when both doors remained available. Multi-voxel pattern analysis showed that upcoming choices could initially be decoded from visual cortices before the appearance of the lock cues, and additionally from the motor cortex after the lock cues had confirmed which doors were open. When participants were able to maintain the same choice that they originally selected, the availability of alternative options was represented in fine-grained patterns of activity in the dorsolateral prefrontal cortex. Further, decoding accuracy in this region correlated with the subjective level of freedom that participants reported. These results suggest that there is neural encoding of the availability of alternative options in the dorsolateral prefrontal cortex, and the degree of this encoding predicts an individual's perceived freedom of choice.