Among those set to be released were some of the intelligence personnel purged after the ousting of former premier and army intelligence chief Khin Nyunt in a power struggle in 2004, the official told AFP.
But the vast majority were expected to be common criminals, despite human rights groups accusing Myanmar of holding more than 2,000 political prisoners.
Myanmar's President Thein Sein, in a message read on state television yesterday, said that the government was reducing all inmates' sentences by one year and commuting the death penalty to life imprisonment.
Human Rights Watch called the news a "sick joke" given the numbers of political prisoners in the country, while the United States urged the regime to go much further as it renewed economic sanctions against Myanmar.
The US and democracy activists have long called for a broader amnesty in the Southeast Asian nation, where the military handed over power to a nominally civilian government led by a retired general after an election last year.
Many political opponents remain held under vague laws for double-digit terms, and while it was unclear how many had less than one year to serve and so would be released, the numbers were expected to be extremely small.
"This is a pathetic response to international calls for the immediate release of all political prisoners," said Elaine Pearson, deputy Asia director at Human Rights Watch (HRW).
About 2,600 prisoners began to be released from Yangon's notorious Insein prison today.
"Altogether about 17,000 prisoners from the prisons around the country will be released. Jailed former intelligence personnel will be among those released," the official told AFP, declining to be named.
Opposition leader Aung San Suu Kyi was released from house arrest in November shortly after the election, Myanmar's first in 20 years.
The opposition and the West welcomed her freedom but criticised the poll as anything but free and fair, and have urged the government to do more to improve its human rights record.
In a formal notice to Congress yesterday, President Barack Obama said that he was renewing sanctions that would otherwise have expired this month because Myanmar, also known as Burma, was taking actions "hostile to US interests".
Obama, using language nearly identical to previous years, criticised actions by the regime including the "large-scale repression of the democratic opposition" in deciding to extend the measures that limit trade with Myanmar.
