The United States welcomed the prisoner release as an "important step to de-escalate tensions" after more than two months of political crisis as protesters seek to oust President Viktor Yanukovych.
However the government concession was unlikely to appease the protesters occupying Kiev's central Independence Square and nearby buildings who are demanding a new, pro-Western government.
"I don't want to wage war," Yanukovych said in a televised interview.
"I want to safeguard the state and resume a stable development. We are asking the opposition to also make concessions."
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Yanukovych made several concessions after protests turned deadly at the end of January, dismissing the government and signing a law agreeing to amnesty all detainees.
But he set one condition -- that protesters evacuate all public buildings they are occupying, such as Kiev city hall next to Independence Square.
Yesterday, Ukraine's attorney general Viktor Pshonka announced that "234 people were arrested between December 26 and February 2. None of them are in custody anymore".
The opposition has agreed to vacate "part" of Grouchevsky street, where government and parliament buildings are located, to allow traffic to move freely.
"This does not mean we are vacating the (occupied) premises or lifting the barricades," said opposition representative Andrii Dzyndzia.
US State Department deputy spokeswoman Marie Harf urged both sides to continue to de-escalate tensions and find a compromise to the crisis.
"The next step in this process should be the formation of a multiparty technical government, with genuine power-sharing and responsibility," she said.