The women were sentenced in a robbery that netted just $11 and have been in prison for the past 16 years, the Jackson (Miss.) Clarion-Ledger reported.
Barbour Wednesday issued two orders indefinitely suspending the sentences of the Scott sisters, Jamie, 38, and Gladys, 35.
The decision follows a campaign by the women's mother, attorneys, the NAACP and others to free them.
Barbour is considering running for president of the United States. State Sen. Willie Simmons praised the move as "courageous."
"Normally, a candidate would shy away from that," said Simmons, one of a handful of lawmakers who have met with Barbour about releasing the pair.
Many have criticized the severity of the sisters' sentences and Barbour also said it is expensive to keep them in prison because Jamie Scott requires regular dialysis, estimated to cost about $200,000 annually.
"Their incarceration is no longer necessary for public safety or rehabilitation, and Jamie Scott's medical condition creates a substantial cost to the state of Mississippi," Barbour said in a statement.
If Jamie Scott required a transplant while in prison, the state would have to pay for it. If she is released, she is eligible for Medicaid and the federal government would pay for it.
"Instead of Mississippi taxpayers bearing that, it will be spread over all the taxpayers in the United States," Barbour said.