Afghanistan plans to release 72 prisoners that the United States considers a threat to security, according to a spokesperson for President Hamid Karzai.
The Afghan government only has enough evidence to try 16 of 88 prisoners considered a threat to US security and plans to free the remaining detainees.
The move will further strain relations between the two countries that are already strained due to Mr Karzai's refusal to sign a security deal that would shape the US military presence after most foreign troops leave this year.
Without a deal, Washington could pull most of its troops out after 2014.
The United States is strongly opposed to their release as it says the prisoners, being held in Afghanistan, have been involved in the wounding or killing of US and coalition troops.
State Department spokeswoman Jen Psaki said "these 72 detainees are dangerous criminals against whom there is strong evidence linking them to terror-related crimes, including the use of improvised explosive devices, the largest killer of Afghan civilians,"
Ms Psaki said "time will tell" whether the release of the detainees will affect the signing of the agreement. adding that it was in the interest of the Afghan people and its government to sign it.
The Afghan government says, however, there is no evidence against 45 of the 88 prisoners, while the evidence against a further 27 detainees is not sufficient to put them on trial.
Aimal Faizi, a spokesperson for Mr Karzai said "we cannot allow innocent Afghan citizens to be kept in detention for months and years without a trial for no reason at all,"
"We know that unfortunately this has been happening at Bagram, but it is illegal and a violation of Afghan sovereignty and we cannot allow this anymore."
The president's decision came after the head of Afghanistan's spy agency presented the cases against the prisoners.
US senators visiting Afghanistan last week said releasing the prisoners would irreparably damage ties with the United States, but stopped short of saying it would prompt a full military withdrawal.
Mr Karzai has called the so-called "zero option" an empty threat and suggested any security deal can wait until after the presidential elections in April. The United States says it needs time to prepare a post-2014 mission.