The US Justice Department will widen the criteria it uses to decide which drug offenders to recommend to the president for clemency, Attorney General Eric Holder said.
The department expects thousands of drug offenders currently serving time to be eligible for reduced sentences under the new clemency guidelines and it will prepare to review an influx of applications, Holder said in a video address.
Under US law, the president can reduce sentences or pardon Americans serving sentences for federal crimes. The Justice Department will now recommend more candidates for the president's consideration.
Details of the new criteria will be announced later this week by Deputy Attorney General James Cole.
Mr Holder hinted the guidelines may include applying a 2010 law that reduced sentences for crack cocaine offenders to those sentenced before the law was enacted.
"There are still too many people in federal prison who were sentenced under the old regime - and who, as a result, will have to spend far more time in prison than they would if sentenced today for exactly the same crime," Holder said in his address.
Granting clemency to nonviolent drug offenders is part of the Obama administration's strategy to reduce spending on federal prisons by reducing the number of inmates serving time for nonviolent drug crimes.
Last year, Mr Holder launched the "Smart on Crime" initiative to review the criminal justice system and look for ways to make spending on prisons more efficient by focusing on violent offenders.
Some Republicans in Congress say more lenient sentences would reverse the drop in crime the United States has seen over recent decades.
In 2010, nearly half of 216,000 federal inmates were serving time for drug-related crimes, data from the Department of Justice shows.