Egypt's president Abdel Fattah al-Sisi has pardoned jailed Al Jazeera journalists Mohamed Fahmy and Baher Mohamed, along with 100 prisoners, the presidency and official media reported.
Presidency spokesman Alaa Youssef said the two Al-Jazeera colleagues were among the pardoned group, which also included women activists Sana Seif and Yara Sallam.
Fahmy, Mohamed and their Australian colleague Peter Greste were sentenced in a retrial last month for broadcasting "false" news that harmed Egypt and aiding the outlawed Muslim Brotherhood.
Greste was deported in February through a presidential decree, and his name did not appear on the list of those pardoned.
The pardons came on the eve of the Muslim holidays of Eid, when prisoner releases often take place in Muslim countries.
"This comes in the framework of President Abdel Fattah al-Sisi's initiative to release a number of youth which he launched ... in December," local media quoted presidential sources as saying.
In a tweet, Fahmy confirmed that the journalists had received the news, writing "AJ Staff is Free!"
It has been 633 days since the three journalists were first arrested on December 29, 2013.
In wake of the reports Greste told the ABC Middle East correspondent Sophie McNeill it was "absolutely extraordinary news".
Greste was deported back to Australia in February, and called for Mr Sisi to "undo that injustice" after the three were sentenced in August.
Fahmy, who had abandoned his Egyptian citizenship to qualify for deportation, is expected to leave for Canada once he is freed.
A spokesperson for the Canadian government said that Canada was pleased with the pardon and it would help arrange Fahmy's departure from Egypt.
The pardons also come a day before Mr Sisi planned to head to New York for the 70th session of the UN General Assembly.
Human rights groups have accused Egyptian authorities of widespread violations since the army toppled the country's first democratically elected president, Islamist president Mohamed Morsi, after mass protests against his rule two years ago.
The pardons were also announced on the same day that France announced it had agreed to sell Egypt two French Mistral helicopter carriers, whose planned sale to Russia had been cancelled.