President Obama has commuted the prison sentence of , the army intelligence analyst convicted in 2010 of a massive leak of US diplomatic cables through WikiLeaks.
Under the terms of the commutation, Manning will be freed on May 17 of this year.
Manning has been jailed for nearly seven years after being sentenced to 35 years for the leak of more than 700,000 sensitive government documents.
The commutation will reduce Ms Manning's sentence, but does not constitute forgiveness of the crime.
“President Obama should be lauded for his decision to commute what was by far the longest sentence in US history for a leak of government information - a punishment that was disproportionate and, as we now know, placed a transgender woman in a position of vulnerability in a men’s prison,” said Sarah St Vincent from international advocacy group, Human Rights Watch.
Manning has made two suicide attempts in custody and has an appeal pending before a military court.
But not everyone has welcomed the news.
“I frankly thought this was an appalling decision on the part of President Obama, given that what we’re talking about with Chelsea Manning has been one of the biggest leaks of US intelligence information ever,” Peter Jennings, Executive Director of the Australian Strategic Policy Institute, told SBS.
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“This demonstrates that at the moment the US intelligence community is under attack both from the left and from the right,” he said, referring to the President-elect’s of the CIA and the FBI.
“You’ve got Trump basically doubting anything he hears from the CIA or the FBI,” Mr Jennings said.
“So these are dark days for the intelligence establishment, which really is a core part of the US national security framework.”
The action comes as part of a wave of commutations and pardons in President Obama's final days, with the outgoing leader now responsible for more than 1,385 commutations and 212 pardons, frequently for non-violent drug offenders.
Donald Trump will take over the presidency in an inauguration ceremony this Friday.
Rights groups continue to petition the White House for clemencey for Edward Snowden, the high-profile NSA whistleblower.
However, such action appears unlikely.
White House Press Secretary Joshua Earnest last week said there was a "pretty stark difference" between Ms Manning's plea and Mr Snowden's.
“Chelsea Manning is somebody who went through the military criminal justice process, was exposed to due process, was found guilty, was sentenced for her crimes, and she acknowledged wrongdoing,” he said.
“Mr. Snowden fled into the arms of an adversary, and has sought refuge in a country that most recently made a concerted effort to undermine confidence in our democracy.”
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WikiLeaks founder Julian Assange last week agreed to be extradited to the United States if President Barack Obama granted clemency to Ms Manning.
"If Obama grants Manning clemency Assange will agree to US extradition despite clear unconstitutionality of DoJ (US Department of Justice) case," WikiLeaks wrote on Twitter.
Washington has maintained the threat of prosecuting Assange over the 2010 leak, though no charges have been filed.
Assange has been living in the Ecuadoran embassy in London since June 2012 to avoid extradition to Sweden to face sexual assault allegations.
The Australian former computer hacker said he fears Stockholm will in turn extradite him to the US, where he angered Washington over WikiLeaks' publication of the Manning leak.
-With AFP
