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The cross-border prisoner exchange comes amid peace talks which have raised hopes for an end to Yemen's eight-year-old war.
The prisoner swap deal between the US and Iran could take place as early as next week, according to eight Iranian and others familiar with the deal.
Many of the prisoners had not seen family members or loved ones during their detention period, and were reunited in 'emotional scenes' across Yemen.
Iranian government spokesperson, Ali Rabiei reportedly said Iran is waiting on a green light from Washington to proceed with a prisoner swap.
Tehran is ready for a full prisoner exchange with the US, Iranian Foreign Minister Mohammed Javad Zarif said in an address to the Council on Foreign Relations on Monday.
A Swiss diplomat and two German intelligence officials have reportedly joined forces with an Egyptian general to broker a prisoner swap between Hamas and the Israeli government.
The US envoy pressed the Afghan government and the Taliban to move ahead with a delayed prisoner swap amid the rapidly spreading coronavirus.
Hamas has freed 13 Israeli hostages, as well as 10 Thais and a Filipino, while 39 Palestinian detainees were released by Israel as a temporary truce went into force in Gaza
Hundreds of prisoners will be exchanged as part of a deal between Yemen's Saudi-backed government and the Houthi rebels ahead of planned peace talks in Sweden.
Ahmad Salaymeh, 14, was released from the Israeli prison of Damon near Haifa on day five of the truce. The 8th grader was put under house arrest last May on suspicion that he threw rocks at settlers of Ma'ale Zeitim in occupied East Jerusalem.