Indian national Sarabjit Singh - on death row in Pakistan for more than 21 years for spying and carrying out bomb attacks - is to be freed, Pakistani newspapers and campaigners say.
They say the law minister has signed an order for his release.
Campaigners say they expect Mr Singh to walk out of jail imminently.
He was sentenced for four bomb attacks that killed 14 people in the Lahore and Faisalabad in 1990. He has always denied carrying out the bombings.
The Indian government has repeatedly asked Pakistan for him to be pardoned on humanitarian grounds.
The length of his time in prison - much of it in solitary confinement - meant that his case has received much coverage in the Indian and Pakistani press.
Mr Singh came within hours of being hanged in 2009 - when Pakistan's leadership under pressure from his family and campaigners suspended his execution.
He has constantly argued that he is a poor farmer - the victim of mistaken identity - who strayed drunk from his border village into Pakistan.
But Pakistani officials said that Sarabjit Singh was actually Manjit Singh, arrested while trying to slip back into India after carrying out the bombings.
"I am absolutely thrilled to hear news of his imminent release," British lawyer Jas Uppal told the BBC.
Ms Uppal launched an international campaign to secure his freedom after reading about his plight on the BBC website.
She launched a website - www.freesarabjitsingh.com - as part of her campaign.
Pakistan's Dawn newspaper quoted Law Minister Farooq Naek as saying that Mr Singh's death sentence had been commuted to life imprisonment by President Asif Ali Zardari.
Mr Farooq said that because the Indian had completed his sentence, he was entitled to be released.
Mr Singh's expected release follows a similar move by an Indian court allowing ailing Pakistani microbiologist Mohammad Khalil Chishti - also convicted of a murder he denied - to travel to his home country on humanitarian grounds pending an appeal against his conviction.
Correspondents say that both moves reflect warmer relations between India and Pakistan which reached a low point following attacks in Mumbai by Pakistani-based militants in 2008 that killed 165 people.
Pakistan and India frequently arrest each other's citizens, often accusing them of being spies after they have strayed across the land or maritime border.