The handover of the prisoners will be organised by the International Committee of the Red Cross and the Spanish Red Cross, Polisario said on Friday in a statement carried by the Algerian APS news agency.
But Morocco reacted angrily to the move, saying releases "in driblets" were not enough, and demanding the immediate freedom of all remaining prisoners still held by the Polisario Front.
"The freeing of Moroccan hostages group by group confirms the morally reprehensible approach adopted by opponents of the kingdom's territorial integrity," the Moroccan foreign ministry said in a communique.
It condemned "the media exploitation that accompanies each partial release" by the Polisario, which it said demonstrates that the prisoners are being used for "base political and propaganda purposes far from any humanitarian considerations."
The latest prisoner releases were triggered by the intervention of Spanish Prime Minister Jose Maria Aznar, according to the Polisario statement.
"The Spanish government has always shown an interest in the Western Sahara conflict and notably in its humanitarian aspect," it said.
Spanish PM Jose Maria Aznar (R) has shown a personal interest
More than 450 prisoners have now been released in less than two years under pressure from the Spanish government, bringing to more than 1,300 the number released since the beginning of the conflict in 1995, the statement added.
A Moroccan official told AFP there are still 914 Moroccan soldiers held by the Polisario.
The last such move by the Polisario Front in February saw the release of 100 Moroccan prisoners in a gesture of goodwill to mark Eid al-Adha, a Muslim feast day.
The UN Security Council last month passed a resolution calling for a referendum on the political future of the Western Sahara region, a former Spanish colony on the northwest coast of Africa.
Backed by Algeria, the Polisario Front is seeking the disputed territory's independence from Morocco, which annexed it in 1975. The group is mostly made up of the indigenous nomadic inhabitants of the Western Sahara region, the Saharawis.
Polisario has welcomed a settlement plan drafted by former US secretary of state James Baker and endorsed by the Security Council, calling for a five-year period of limited autonomy for the region followed by a vote among its 300,000 inhabitants to determine its political future.