Taliban prisoners will be released as part of a new ceasefire that could lead into long-delayed peace talks.
Ghani said the militants would be freed during the Eid al-Adha holiday, which started Friday and has prompted a national ceasefire for three days.
The release would complete the government's pledge to free 5,000 Taliban fighters as outlined in a deal the insurgents signed with Washington, he said.
"To show goodwill and accelerate the peace talks, we will release 500 Taliban prisoners in response to the group's three-day ceasefire announcement," Ghani said in an Eid speech.
However, the 500 inmates are not on the original list of 5,000 demanded by the Taliban.
Kabul authorities have already released 4,600 of those prisoners but are hesitating about the release of the final 400, deeming them too dangerous.
"I do not have the right to decide on the release of those 400 Taliban prisoners who are accused of serious crimes," Ghani said, adding that a gathering of Afghan elders would decide their fate.
The Taliban, who have insisted on the release of those 400 militants, did not immediately comment.
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