Those to be freed include 50 men who were on the death row.
'War for development'
Omar Hassan al-Bashir, Sudan's president, struck an upbeat note following the deal.
"Now the crisis has finished in Darfur. Now the war is finished in Darfur ... We must start fighting the war for development," al-Bashir said at a rally in the capital of North Darfur.
The Qatar-mediated truce has revived hopes of peace in the troubled region of Darfur in Sudan's west.
The conflict in Darfur has pitched ethnic African tribesmen against the Arab-dominated Khartoum government, claiming the lives of up to 300,000 lives - from the fighting as well as famine and disease - and displacing 2.7 million people, according to the UN.
Sudan puts the death toll at 10,000.
But unless a comprehensive agreement can be reached between the sides, many feel it may be difficult to restore peace.
"This framework agreement is a very important step," Khalil Ibrahim, the Jem leader, said at the ceremony, attended by US, UN, African and Arab representatives among others.
"We point out, however, that the road to peace still needs much patience and honest concessions from both sides."
Previous partial peace agreements have been short-lived and questions remain over the diverse Darfur factions will make headway.
While the truce is significant because Jem constitutes the largest anti-government group fighting in Darfur, other factions have refused to negotiate.
The Sudan Liberation Movement (SLA), the first group to take up arms against the government, has shunned the Qatar peace talks.