"Pakistan has decided in principle to release Mullah Baradar," Sartaj Aziz, an advisor to the prime minister on national security and foreign affairs, told AFP.
But Aziz said Baradar would not be handed over directly to the government in Afghanistan.
"He is likely to be released this month," he said. "He will not be handed over to Afghanistan."
Pakistan has already released 33 Afghan Taliban detainees in the last year, including the militants' former justice minister Nooruddin Turabi.
Afghan officials believe the releases can encourage former detainees to talk to the Kabul government, although observers say there is little evidence those hopes have been realised.
Several prisoners are also understood to have returned to the battlefield.
Analysts say Pakistan can facilitate Taliban peace talks and help with logistics, but does not have the power to force the insurgents to the negotiating table against their will.