Pakistan will release a captured Indian pilot as a "peace gesture" on Friday, Prime Minister Imran Khan has said.
Khan disclosed the decision in parliament after a speech in which he said Pakistan wanted to de-escalate the war-like situation, report the BBC and CNN.
Pakistan shot down the pilot's jet on Wednesday, as tensions rose with India over the disputed region of Kashmir.
The capture of the pilot, 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 deadly 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.
"As a peace gesture we are releasing the Indian pilot tomorrow," Khan told Pakistani lawmakers in the National Assembly.
He also repeated his call for the de-escalation of the situation, saying Pakistan and India "have to live in peace."
Amid the rapidly escalating tensions, Khan on Wednesday pushed for talks with Delhi to prevent the risk of a "miscalculation" between the nuclear-armed neighbours.
Indian Prime Minister Narendra Modi, who held an urgent meeting with the country's security chiefs on Wednesday, is yet to publicly comment on the crisis.
India has been demanding an immediate release of the pilot, who is being hailed as a hero in India.
Image credit: Pakistan Information Ministry