Ayatollah Khamenei granted the request by the Judiciary on Wednesday on the eve of Eid al-Mab'ath, a key Islamic occasion marking the anniversary day when the Prophet Muhammad (PBUH) received his first revelation.
The pardon, which also took place during the Ten-Day Dawn celebrations marking the 45th anniversary of the Islamic Revolution, applies to 2,827 convicts.
It includes total amnesty for some and reduced punishment for others.
The proposal was put forth by Iranian Judiciary Chief Gholam-Hossein Mohseni-Ejei.
The Judiciary said that 53 of those pardoned had been sentenced to death by courts, and their punishments have now been commuted to time in prison.
A total of 996 individuals will be released from prison and their criminal cases will be closed, it added. Others were eligible for a reduction in their sentences.
IRNA