The released Indian nationals were later put on four buses which will take them to Wagah border near Lahore for their handing over to the Indian authorities on Sunday.
Police is accompanying the four buses for security reasons.
"The authorities today have released 180 prisoners which is a very positive development and a vindication of our efforts to improve relations between the two countries," Justice retired Aslam Nasir Zahid who heads a non-governmental organisation told reporters.
The organisation is working with an Indian NGO to provide justice and relief to prisoners mostly poor fishermen jailed in Pakistani and Indian jails.
Zahid said the Indian prisoners that included one civilian, Sama Yousuf were released by the government as a goodwill gesture for the start of the new year.
Yousuf was arrested by Pakistani authorities after straying into Pakistan after crossing the border. He said they were still 276 Indian fishermen in jails in Karachi while in recent times the authorities had seized around 320 boats as well.
Marine authorities frequently arrest and seize Indian fishermen and their boats when they wander into Pakistani territorial waters.
Zahid said his organisation was also making efforts to locate missing Pakistani fishermen and get around 42 fishermen in Indian jails.