Dozens of high-profile dissidents, including Min Ko Naing, a student leader from the failed 1988 pro-democracy uprising, were freed in Burma after the latest round of prisoner amnesties.
State media said that 651 prisoners would be released, though it did not clarify how many were political prisoners.
President Thein Sein's arrival in office last year has seen a significant shift in direction after decades of hardline military rule.
Freeing prominent political prisoners has been one of the key conditions of Western nations for easing sanctions against the country, formally known as Burma.
A huge cheering crowd greeted Min Ko Naing as he emerged from the prison in Thayet, the Associated Press said.
Those released also included former Prime Minister Khin Nyunt, who was placed under house arrest in 2004.
Nilar Thein, who was jailed in 2008 for 65 years along with 12 other activists after "illegally using electronic media" and forming a political organisation, was also released.
"I'm healthy and happy to be released and happy to see my baby," she told the BBC, referring to her daughter, born the year before her imprisonment
"There are still 25 more left inside," she told the BBC. Her husband Kyaw Min Yu was also released, the BBC reported.
U Khun Htun Oo, a pro-democracy campaigner and the leading politician from the ethnic minority Shan State who was sentenced to 93 years in prison in 2005, was another opposition figure freed in the amnesty.
The decision to release the dissidents comes two days after pro-democracy opposition leader Aung San Suu Kyi confirmed she will run for a seat in the country's parliament.
Suu Kyi's National League For Democracy party said on Tuesday that she will run for one of the 48 vacant seats due to be contested in an April by-election.
It is unlikely that Suu Kyi or her party will hold significant power even if they win the election, because the military and pro-military party are guaranteed a majority of seats, but her decision and the prisoner amnesty still represent a bold turnaround since Suu Kyi's overwhelming victory in the country's 1990 poll was stamped out by the regime.
In a visit to Burma last week Foreign Secretary William Hague met Suu Kyi and said that Britain supported her efforts to expand democracy in the country.
Today Hague hailed the release of political prisoners in Burma as a demonstration that the nation's leaders were committed to reform.
Hague said the move was "exactly the kind of measure" he had called for during his historic visit to the state last week.
"I am delighted to hear that a significant number of political prisoners in Burma have been released, including 88 Generation and ethnic leaders," he said.
"The release of all political prisoners is a long-standing demand of the international community and I warmly welcome these releases as a further demonstration of the Burmese government's commitment to reform.
"This is exactly the kind of measure I called for in all my meetings with Burmese government leaders last week. So is this week's much-needed ceasefire in the conflict with the Karen people.
"I hope these positive steps will contribute to greater democratic participation in the upcoming parliamentary by-elections."