The government action to withdraw 1,745 cases is subject to "certain conditions" and is based on recommendations of a committee constituted to look into the matter, Mufti said.
She said her government has also recommended to give amnesty to more than 4,000 people, who are said to be involved in minor incidents of stone pelting over the past two years.
In a written reply to a question in the Assembly, Mufti did not disclose the particulars of first-time offenders due to security considerations for them and their families.
Seven cases were not admitted and 1,692 were chargesheeted, while 1,841 cases were under investigation, Mufti, who hold the home department portfolio, said.
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Intense clashes had rocked Kashmir Valley in 2016 following the death of Hizbul Mujahideen commander Burhan Wani in July that year, resulting in the death of over 85 people.
The chief minister said while 2,904 cases were registered and 8,570 people were arrested in connection with stone- pelting incidents in 2016, the number of such cases in 2017 dropped to 869 in which 2,720 people were arrested.
She said 56 government employees and 16 Hurriyat Conference activists were among the 4,949 people found involved in stone-pelting incidents, while 4,074 were not affiliated with any separatist or militant group.