It was not clear whether any political prisoners will be among those released.
The administration of President Thein Sein has made freedom for political prisoners a centrepiece of reforms to seek international favour after almost five decades of army rule. Earlier amnesties helped convince Western nations to ease sanctions imposed on the previous regime.
The announcement comes just days before Monday's planned visit by Mr Obama, who will become the first sitting American head of state to visit the country.
Under the junta, rights groups said more than 2000 activists and government critics were wrongfully imprisoned.