Mr Mutharika, speaking as UN chief Ban Ki-moon visited his country, said he had ordered their immediate release.
Steven Monjeza and Tiwonge Chimbalanga were given 14-year jail terms earlier this month after being convicted of gross indecency and unnatural acts.
The case has sparked international condemnation and a debate about homosexuality in the country.
Mr Ban hailed the president’s decision as “courageous”.
“This outdated penal code should be reformed wherever it may exist,” he said.
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