The Afghan government welcomed the move, as it sees him as one of the few senior Taliban figures willing to negotiate a peace deal to end unrest.
Mullah Baradar is one of the four men who founded the Taliban movement in Afghanistan in 1994.
He became a linchpin of the insurgency after the Taliban was toppled by the US-led invasion in 2001.
More than 30 Taliban members have been released from Pakistani jails in recent months, but Mullah Baradar is the one that the Afghan government is waiting for.
A political adviser to the Kabul government team which addresses the issue of Taliban peace negotiations, Ismail Qasim Yar, said the government is ready to negotiate, but there is little room for manoeuvre. He made it clear that there can be no change to the constitution, one of the demands of the Taliban.
But he said that since Mullah Baradar was \"inclined towards a political solution,\" then his release might make a solution possible.
Mullah Baradar held several senior positions in the Taliban government before its fall in 2001. He then fled to Pakistan and for some years was the Taliban\'s military commander as they regrouped to fight a guerrilla war.
He was reportedly arrested in a secret raid by CIA and Pakistani agents.
The BBC\'s Aleem Maqbool in Islamabad says releasing one of the founders of the Taliban and a mastermind of the Afghan insurgency would seem a counter-productive step for the Kabul government and the US-led coalition.
But Mullah Baradar has been seen as one of the few senior Taliban figures who has shown a willingness to negotiate, our correspondent says.
The government in Kabul has been pressing for him to be free.
Afghan diplomats had suggested Pakistan was trying to hinder the reconciliation process by backing more hardline elements within the Taliban.
The Taliban opened a political office in Doha in June, but it was quickly closed after President Karzai complained that they had flown a flag and put up a plaque as if they were a government in exile.
A key Taliban operative, he was believed to be in day-to-day command of the insurgency and its funding"
Profile: Mullah Abdul Ghani Baradar
What next for Mullah Baradar?
Since then the US, UK, and Turkey have all attempted to mediate to reopen talks. President Karzai has appealed to the Taliban leadership to return home and negotiate openly, but has not offered guarantees of security.
Even if a political settlement is agreed, which will be hard, it may be difficult to deliver it, says the BBC\'s David Loyn.
The Taliban is no longer the monolithic structure it once was, and a new younger generation of insurgents - particularly those fighting in the allied Haqqani network - may not be willing to stop the war.
Some members of the former leadership, such as Mullah Zaeef, who had been living openly in Kabul, have faced harassment and raids on their homes.
There are also concerns among women\'s rights activists that the fragile gains made since 2001 could be jeopardised for a peace deal with the Taliban.
A prominent MP, Shukria Barakzai, told the BBC that the government\'s priority is to do a deal, \"whatever the price.\" She is among those fighting in parliament to defend laws that protect women from violence, and believes that the government does not see this as a priority.
Mrs Barakzai said a deal with the Taliban would make victims of \"the people of Afghanistan, and in particular the women of Afghanistan.\"
News From: http://www.7StarNews.com