Newly elected Malaysian Prime Minister Mahathir Mohamad, who was sworn in on Thursday, has vowed to investigate the 1MDB scandal and take action against those who may have abetted or benefited from corruption at the fund.
Anwar and Mahathir agreed in 2016 to join forces with the aim of ousting scandal-hit Najib Razak and his Barisan Nasional (BN) alliance.
The pardons board in Malaysia's capital will meet on Wednesday to discuss Anwar's release and Mahathir said he would be released the same day.
Dr Mahathir, who first led the country from 1981 to 2003 under Umno, is now Prime Minister under an agreement with PH that he would eventually hand over power to Mr Anwar, whose Parti Keadilan Rakyat (PKR) has the most MPs in the four-party alliance. He said the reformist politician, after his release, would need to seek a seat in parliament and then might be given a cabinet post, but would play the same role in the coalition as leaders of the other three parties in the alliance except Mahathir himself, who is the prime minister.
But in 1998, they disagreed on how to tackle the Asian financial crisis and fell out.
The new prime minister also said jailed opposition leader and coalition partner Anwar Ibrahim would be freed on Wednesday.
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In an astonishing U-turn past year, Anwar shook hands with Mahathir and agreed to join forces to oust scandal-tainted Najib.
Asked about other possible crimes, Mahathir said: "We can not do everything at the same time at one go".
He also told a news conference that his government had a rough idea of the whereabouts of Malaysian financier Low Taek Jho, who is accused of links to a plot to siphon billions of dollars from the fund, 1Malaysia Development Berhad (1MDB).
1MDB is now under global probes in at least six countries, including Switzerland and Singapore, over charges of money laundering and bribery.
Reuters reported that the Malaysian Anti-Corruption Commission found evidence in late 2015 that RM42mil was transferred from a former subsidiary of state fund into an account of Razak.