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The Palestinian group's military wing said the two women, identified as Yocheved Lifshitz, 85, and Nurit Cooper, 79, had been freed for “compelling humanitarian” reasons.
Their husbands are still in captivity, among more than 200 other hostages held by Hamas, according to Israeli media.
The office of Israeli Prime Minister Benjamin Netanyahu confirmed the two women's identities, saying they lived at the Nir Oz kibbutz where scores of residents were murdered during the October 7 Hamas attack.
“They are currently heading towards a medical centre in Israel specially prepared for their arrival,” his office said.
“I can confirm that my mother Yochi [Yocheved] Lifshitz was one of two hostages released to the Red Cross this evening,” Ms Lifshitz's daughter said in a statement.
The International Committee of the Red Cross said it helped enable the hostage handover after also playing a role in the release of two US hostages last week.
“We facilitated the release of two more hostages, transporting them out of Gaza this evening,” the ICRC wrote on X, formerly Twitter.
“Our role as a neutral intermediary makes this work possible and we are ready to facilitate any future release.”
American mother and daughter Judith and Natalie Raanan were freed on Friday, with Hamas also citing humanitarian reasons and efforts by Qatar and Egypt.
Israel on Monday increased the confirmed number of hostages to 222. The hostages were seized when Hamas gunmen crossed the border and attacked kibbutzim, towns and military bases in southern Israel earlier this month.
About 1,400 people were killed in the worst attack ever to hit Israel, according to Israeli authorities.
Israel then launched a war on Hamas. More than 5,000 Palestinians have since been killed in air attacks on Gaza so far, according to its health ministry.