With the pardon, which the cabinet must approve at its weekly meeting, Sanchez aims to defuse tensions in the northeastern region and start negotiations between the central government and the Catalan authorities.
Polls show that 60% of Spaniards, like all opposition parties, oppose the release of the nine politicians and activists.
They were imprisoned in 2019 for their role in the chaotic and often violent events that led to the biggest political crisis in Spain in recent decades.