Pakistan will release a captured Indian pilot as a “peace gesture” on Friday, Prime Minister Imran Khan has said.
Mr Khan revealed the decision in parliament after a speech in which he said Pakistan was focused on de-escalation.
Pakistan shot down the pilot’s jet on Wednesday, as tensions rose with India over the disputed region of Kashmir.
The capture of Abhinandan Varthaman was a major setback for India. Both sides are under pressure to calm tensions.
India struck targets in Pakistan on Tuesday after a militant attack on its security forces earlier this month that it blamed on its neighbour.
Pakistan said it had no choice but to retaliate with air strikes on Wednesday, which led to a dogfight and the Indian fighter jet being shot down in Pakistan-administered Kashmir.