(CNN) — Myanmar released 220 political prisoners — thought to be the largest number ever in the country’s history — in an apparent bid to soften international criticism over human rights and ease economic sanctions.

A total of about 300 political prisoners are expected to be released as part of an amnesty deal Friday, said Tate Naing, a spokesman for the Assistance Association for Political Prisoners.

Among those already freed is former Prime Minister Khin Nyunt as well as Ko Ko Gyi and Mo Ko Naing, both student leaders during the country’s 1988 pro-democracy protests that thrust opposition leader Aung San Suu Kyi onto the world stage.

A presidential pardon has granted amnesty to 651 prisoners in Myanmar, also known as Burma, though not all of those detained are identified as so-called prisoners of conscience.

Democracy activists, observers say, are expected to be freed throughout the day — one of the preconditions western government have insisted upon before sanctions could be lifted.

Opposition leader Khun Tun Oo and activist monk U Gambira, whose imprisonments have long prompted condemnation from rights groups, were also released Friday, Naing said.

“All citizens of Burma… are very happy to hear that there are so many political prisoners released today,” said Nyan Win, a spokesman for the opposition National League for Democracy party.

Those freed included NLD members, he said.

U.S. President Barack Obama described the release of political prisoners “a substantial step forward for democratic reform.”

“I applaud President Thein Sein’s decision to release hundreds of prisoners of conscience, which is a crucial step in Burma’s democratic transformation and national reconciliation process,” Obama said in a statement.

“I urge the government to ensure that these and all other former political prisoners are allowed to participate fully and freely in the political process, particularly the upcoming by-elections, and to free all remaining prisoners of conscience,” Obama said.

Hillary Clinton, whose visit last month to Myanmar was the first by a U.S. secretary of state in more than 50 years, announced the beginning of the process of exchanging ambassadors and called Friday’s events a “momentous day” for Myanmar.

Friday’s releases come one day after the country’s leadership announced a cease-fire deal with an ethnic rebel group that has waged a bitter, decades-long insurgency for greater autonomy.

The agreement with the Karen National Union has been widely seen as another attempt by the nominally civilian government to gain greater international credibility.

The Karen will now be permitted to travel throughout the country, but without weapons, a government official said.

Karen leaders and activists said it was too early to gauge whether peace would take hold.

One of eight prominent ethnic groups in Myanmar, the largely Christian Karen have been fighting in the country’s eastern jungles for greater rights since the nation’s independence from Britain in 1948.

National reconciliation has been a key demand of democracy leaders as well as Western powers, including the United States.

The cease-fire agreement Thursday came on the same day Suu Kyi’s party said it will participate in upcoming elections. It said it plans to announce a roster of 23 candidates, including Suu Kyi, with 48 seats up for grabs.

Ruled by a military junta since 1962, Myanmar is now under President Thein Sein, a former general elected in March, 2011. The new government has instituted rapid reforms but the verdict is still out on whether they are genuine or merely moves to appease critics.

In October, the government granted a mass amnesty, which authorities say will eventually free 6,300 prisoners.

“The government is striving for emerging good governance and clean government, flourishing of democratic practices, ensuring rule of law, making economic reform and motivating environmental conservation in building a new peaceful, modern, and developed discipline-flourishing democratic nation,” the president said then.

Last week, Suu Kyi met with William Hague, the first British foreign secretary to visit Myanmar in more than 50 years.

Thursday’s announcement coincides with a meeting between U.S. diplomats and Suu Kyi, a Nobel Peace Prize winner and the face of democracy in Myanmar.

Suu Kyi has lived most of the past two decades under house detention.

She was released in 2010.

— CNN’s Moni Basu, Michael Martinez and Jill Dougherty contributed to this report.