Those detained will be released “without exception” but will face a travel ban, according to the decision from Prosecutor General Ghassan Oueidat.
The source confirmed he had also filed charges against Tarek Bitar, the judge leading the investigation into the explosion, as the legal tug of war over the blast reared its head once more.
Mr Oueidat imposed a travel ban on Mr Bitar and charged him with “rebelling against the judiciary”, another source told AFP.
Among those released on Wednesday was the former head of customs, Badri Daher, the most senior official detained.
Mr Bitar was in charge of investigating the explosion that killed 220 people, injured thousands and destroyed large parts of the capital on August 4, 2020.
He hit back soon after Mr Oueidat's decision, insisting he would continue with his duties, the state-run National News Agency reported. He described Mr Oueidat's decision as “illegal”.
Mr Bitar had on Monday resumed his probe after 13 months of delays and charged a number of officials — including Mr Oueidat himself, as well as the heads of two of Lebanon’s security agencies, the Prime Minister at the time of the blast Hassan Diab, and other judicial officials.
It had been on hold for more than a year as Mr Bitar was hit by a succession of lawsuits from senior officials over the conduct of his investigation. They included two former ministers, Ali Hassan Khalil and Ghazi Zaiter — both still sitting MPs from the Shiite Amal Movement of powerful parliamentary speaker Nabih Berri.
Mr Bitar had on Monday cited legal studies that challenged the 13-month suspension of the probe. He had also ordered the release of five of the 17 low and mid-level officials who had been detained without charge since the explosion.
But barely a day after he returned to work, Mr Bitar was told by Mr Oueidat on Tuesday that the highly sensitive and politicised investigation remained suspended.
The dispute highlights the uphill challenge in the push for justice, with Mr Oueidat's withering response highlighting the issues Mr Bitar is facing.
Mr Oueidat told The National that Mr Bitar had not informed him of anything, later telling AFP: “We were only informed of Bitar's decision through the media.
“Since he considers that the general prosecution doesn't exist, we will also act like he doesn't exist.”
Mr Bitar has gained a reputation as a single-minded, apolitical prosecutor — perhaps an anomaly in a country where the judiciary can be heavily politicised and appointments are made by politicians.
Yet while he has received support from many of the families of the victims, Mr Bitar has also been lambasted by his critics. Among those who have called for his dismissal is Hezbollah, the Iran-backed armed group and political party that has accused him of bias.
Hezbollah MP Ibrahim Al Moussawi praised the move by Mr Oueidat on Wednesday, saying his "decisions are a step in the right path to restore confidence in judges and the judiciary after it was destroyed by some of the members" of the judiciary.
Deep frustration persists for the families of the victims of the blast, whose grief has been compounded by the absence of justice. Relatives clashed with police outside the national justice headquarters earlier this month as they protested against the judicial blockage that means no senior official has yet been held accountable.
The blast came after a huge stock of ammonium nitrate — which had been stored at the port for years — caught fire. No explanation has been given for why it was there.
The explosion is regarded as a result of decades of mismanagement and corruption in Lebanon. The country is currently entrenched in one of the worst economic crises in modern times according to the World Bank, with much of the population pushed into poverty and the local currency continuing to hit record lows against the US dollar.