Hundreds of thousands of prisoners were arrested in recent anti-government protests after a deadly state crackdown helped quell the nationwide protests, state news agency IRNA reported on Sunday.
The pardon approval by Ayatollah Ali Khamenei came with conditions, according to details announced in state media reports, which said the measure would not apply to any of the numerous dual nationals held in Iran.
A capital charge brought against some protesters, four of whom had been executed, would not be pardoned, according to the state news agency IRNA.
Neither would it apply to those charged with spying for foreign agencies or those affiliated with groups hostile to the Islamic Republic state media reported.
Iran was swept under fire last September after the death of a young Iranian Kurdish woman in the custody of the country's morality police. Iranians from all walks of life took part in one of the boldest challenges facing the Islamic Republic since the 1979 revolution.
According to the HRANA activist news agency, about 20,000 people were arrested in connection with the protests, which the authorities accused Iran's foreign enemies of fomenting.
Over 500 people, including 70 minors, have been killed in the crackdown, according to rights groups. According to the Iranian judiciary, at least four people have been hanged.
A number of people, particularly young people, committed wrong actions and crimes as a result of the indoctrination and propaganda of the enemy, in a letter to Khamenei requesting pardon, said Justice Minister Gholamhossein Mohseni Ejei.
The protests have slowed considerably since the hangings began.
Many of these youth regret their actions now that they have been foiled since the foreign enemies and anti-revolutionary currents plans were foiled, according to Ejei.
In honor of the anniversary of the Islamic revolution of 1979, Khamenei approved the pardons.
It wouldn't apply to those who are accused of spying for foreign agencies, having direct contact with foreign agents, committing intentional murder and injury, and committing destruction and arson of state property, and committing a written commitment to not repeating those activities, said Sadeq Rahimi, deputy judiciary chief.
At least 100 detained protesters were facing possible death sentences this week, according to the Norway-based Iran Human Rights group.
Amnesty International has criticised Iranian authorities for what it called sham trials designed to intimidate those who participated in the popular uprising that has rocked Iran.