The Israeli cabinet has agreed to free about 90 Palestinian prisoners in a move aimed at boosting support for Palestinian President Mahmoud Abbas.
Thousands of Palestinians are being held in Israeli jails
Officials say the prisoners' names will be confirmed later, but it is expected that they will not include anyone who has killed or wounded Israelis.
More than 10,000 Palestinian prisoners are being held in Israeli jails.
The last major release of Palestinian prisoners was in July, after the Hamas movement seized control of Gaza Strip.
After Hamas's victory in Gaza over Mr Abbas's rival Fatah movement, the president dismissed the elected Hamas-led government and formed a new administration in the West Bank.
"The government approved the release of 90 Palestinian prisoners as a gesture of goodwill to president Mahmoud Abbas," a senior official was quoted by the AFP news agency as saying of the vote, which was passed 22-3.
The list of prisoners nominated for release must now be approved by a ministerial commission, which includes members of Israel's Shin Beth security service.
Then, once the names have been announced, there is a 48-hour period in which the public has the chance to appeal against the release of individuals.
Environment Minister Gideon Ezra told Israeli public radio the prisoner release "would favour the restart of negotiations between Israel and the Palestinian Authority".
Palestinian chief negotiator Saeb Erekat told the AFP news agency that he welcomed the planned releases, but also spoke out against Israeli restrictions in the West Bank, saying that "the situation is worse today than last week and something must be done about it".
The decision follows recent talks between Mr Abbas and Israeli Prime Minister Ehud Olmert and comes as the main sponsors of the peace process, the Middle East Quartet - made up of the UN, EU, Russia and the US - are due to meet at UN amid preparations for an international peace summit scheduled for November.