The decision came amid tensions between the nuclear neighbors over cross-border shelling.
The ministry said the foreign minister, after consulting with all the stakeholders, took the decisions including the exchange of three categories of prisoners, namely women, mentally challenged or with special needs and those above 70 years of age.
A Foreign Ministry statement said both sides will facilitate the visit of medical experts to meet and examine the mentally challenged prisoners for their repatriation.
Asif also extended two more humanitarian proposals, namely the exchange of prisoners above 60 years of age and exchange of child prisoners below 18 years of age.
The foreign minister expressed hope that India would "positively reciprocate Pakistan's proposals, in the spirit that they have been made."
India's External Affairs Ministry announced the agreement on the same day. According to an official statement, India's External Affairs Minister Sushma Swaraj in October 2017 suggested to the High Commissioner of Pakistan that the two sides could progress on humanitarian issues related to elderly, women, children and mentally unsound prisoners.
"We note that today Pakistan has responded positively to the minister's suggestion to work towards the release and repatriation of prisoners over 70 years of age and women prisoners who are in each other's custody," said the statement.
Besides, both sides agreed to resume the visits of the Joint Judicial Committee which looks into the issues of fishermen and prisoners in each other's custody, according to the Indian side.
The last visit of such a committee took place in October 2013 to India. The officials on both sides would be working on the modalities to implement the understanding reached on these humanitarian issues, added the statement.
Pakistani Foreign Minister Asif said it was his desire that through such initiatives, Pakistan and India would embark on the road to a comprehensive dialogue, and make a conscious effort to de-escalate the extremely vitiated current environment and the situation on the Line of Control (LoC) in Kashmir and the Working Boundary.
Pakistan and Indian troops had been involved in cross-border shelling in recent days that caused casualties on both sides. Both countries had declared ceasefire along the LoC and Working Boundary. However, they often accuse each other of ceasefire violations.