The decision came a day after Tamil Nadu Chief Minister Jayalalithaa wrote to Prime Minister Narendra Modi seeking a "permanent solution" to the thorny issue.
Rajapaksa tweeted: "On the occasion of the 1st joint sitting of Indian Parliament, I have instructed officials to release the 78 Indian fishermen in SL custody."
The Sri Lankan President in another tweet said: "I look forward to the release of all remaining #SriLankan fishermen in #Indian custody at the earliest."
She had said: "As an immediate measure, I request you to kindly ensure that India registers the strongest disapproval of the belligerent actions of the Sri Lankan Navy."
"A permanent solution to this problem must be found by a decisive initiative under your leadership."
Rajapaksa had previously ordered the release of Indian fishermen in late March when India abstained at the UN Human Rights Council vote on Sri Lanka and again when Prime Minister Modi took office last month.
Sri Lanka's release of Indian fishermen today came after a head-hitting editorial comment yesterday on the issue in the the local Sunday Times.
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