Thai Prime Minister Thaksin Shinawatra ordered the release of at least 900 men, but officials plan to prosecute about 300 for their part in a violent demonstration on Monday. The government's efforts to halt the demonstration left more than 80 people dead in the Muslim-dominated south of the country.
The 300 people being detained will face charges such as rioting, robbery and destruction of government property.
They were among 1,300 people detained by the authorities in Narathiwat province Monday, following a demonstration.
At least 78 of those detained were crushed or suffocated to death after being piled into trucks for transport to detention centers.
In addition, six people died during the protest, after security forces fired live ammunition, water cannons and tear gas.
Government spokesman Jakrapob Penkair says the government only wants to prosecute those who are guilty of crimes.
"The release of the 900 or so people means to send a clear signal that the Thai government at no time wants to detain people who are not directly involved with the instigation at the incident," said Jakrapob Penkair.
Local television showed the first batch of the released detainees being handed the equivalent of $5, and wearing new shirts. Prime Minister Thaksin Shinawatra said the detainees would receive money and clothes, because their shirts were ripped off during their arrests.
Coming under fierce criticism at home and abroad for his handling of the crisis, Mr. Thaksin on Friday night apologized for the deaths, but blamed the riot on troublemakers.
The Thai leader also promised to set up an independent commission to investigate the incident.
Thailand's three southern provinces, which are predominately Muslim, have been plagued by almost daily violence this year. More than 430 people have died.
Although most Thais are Buddhists, around 10 percent are Muslims, living in the south.
The government blames the violence on a Muslim separatist campaign, but many analysts say it is also the result of police and military rivalries, corrupt politicians and organized crime.
Security forces have been placed on alert in the Thai capital, Bangkok, in an effort to thwart any reprisal attacks by Muslim militants in the wake of Monday's deaths.