Those freed included Min Ko Naing, who was one of the leaders of a failed pro-democracy uprising in 1988.
Former Prime Minister Khin Nyunt, who was detained in a purge in 2004, has also been freed from house arrest.
State TV had announced that 651 prisoners would be freed under a new presidential pardon, but did not say how many would be political prisoners.
Burma has faced calls from the international community to free more dissidents.
The BBC’s South East Asia correspondent Rachel Harvey says given the stature of those set free, this could be the most significant breakthrough yet in Burma’s moves towards reform.
Min Ko Naing was considered by many to be the most high-profile political dissident still to be behind bars.
A crowd greeted him as he emerged from prison in Thayet, 545 km (345 miles) north of Rangoon, the Associated Press reports.
Another veteran member of Burma’s 88 Generation Students, Nilar Thein, confirmed to the BBC that she had been freed from Tharya Wadi prison.
The activist served eight years in prison after the 1988 demonstrations and was jailed again in 2007 for 65 years for illegally using electronic media.
The party of democracy leader Aung San Suu Kyi said the move was a “positive sign”.