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Officials of the home and prisons departments of Punjab province and the local police force were quoted by the Daily Times newspaper as saying that there would be a "gradual" release of the detainees in the next few days.
This is being done as not a single case had been registered against any of them, the officials said.
An intelligence agency has sent a report to the federal government describing the situation as 'alarming'.
The report said a "strong retaliation" could not be ruled out after the release of such a large number of suspects.
According to official figures, 390 activists belonging to banned groups like the Sipah-e-Sabaha, Lashkar-e-Jhangvi, Jaish-e-Mohammed, Harkat-ul-Jihad al-Islami, Al-Ansar Trust, Jamatul Furqan and some other proscribed groups working with new names had been detained during a recent crackdown.
At least 42 suspects were detained in Jhang district jail, 40 in Multan central jail, 22 in Bahawalpur jail, seven in Sahiwal jail and four in Mianwali jail, while the rest were being held in different jails across southern Punjab.
Punjab Home Secretary Nadeem Hassan Asif said all the suspects were detained for 30 to 90 days but none of them was formally arrested.
So, the release of these detainees could not be ruled out if first information reports were not registered against them or their detention period was not extended, he said.
Inspector General of Prisons Kokab Nadeem Warraich too said no case had been registered against any of the suspects.