Prime Minister Hailemariam Desalegn made the undertaking in comments to reporters in the capital Addis Ababa, although he did not provide details.
"In order to improve the national consensus and widen the democratic platform, a decision has been made to acquit politicians of their charges and free them from prison," Hailemariam said, according to the media network Fana Broadcasting Corporate.
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In the surprise announcement, Hailemariam said jailed politicians would be pardoned while those awaiting trial would have charges against them dropped.
But he gave no indication of how many prisoners would be affected by the declaration nor whether it would apply to the many thousands regarded as political prisoners by human rights groups and opposition activists.
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Hailemariam also said the Maekelawi interrogation centre -- a notorious facility in operation since the brutal Derg regime of the 1970s and '80s -- would be closed and turned into a museum.
A 2013 report by Human Rights Watch alleged "all manner of abuses, including torture" were carried out by police at the centre, a charge denied by the government.
It is unclear what prompted the decision nor when the release of any prisoners will take place, with information minister Negeri Lencho telling AFP, "We don't know who is going to be released. It takes time to investigate who deserves to be pardoned."
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