The detainees were arrested during a massive protest in the capital earlier this month.
It also welcomes a visit by Amnesty International to verify the detainees were treated well.
A total of 185 people were detained after the unprecedented 13 August anti-government protest in the capital Male.
Security forces fired tear gas to disperse about 3000 protesters who gathered outside the police headquarters, in a crackdown that drew international criticism.
Dozens of protesters were wounded and the government declared a state of emergency.
The island state of 27,000 people
is a popular tourist destination
Those detained include a former attorney general, Muhammad Munavvar, and a former minister, Ibrahim Husayn Zaki.
In the statement issued on Wednesday, the government said police had freed 122 detainees as of Monday.
"The government has implemented numerous reforms in the criminal justice system and to ensure that prisoners are treated well," chief government spokesman Ahmad Shahid said in the statement.
"We would welcome visits by organisations like Amnesty International or the International Red Cross to verify prison conditions and treatment of detainees," Shahid said.
Meanwhile, a European Union fact-finding team concluded its two-day visit to the Maldives during which it held talks with government officials and reformists.
The six EU diplomats based in neighbouring Colombo, Sri Lanka, are likely to submit a written report later this week.
The government has called the demonstration a coup attempt - a charge denied by the main opposition Maldivian Democratic Party.
President Abd Al-Gayum has ruled the island nation of 278,000 people - a popular tourist destination 500km off India's coast - with an iron fist since 1978.