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President Trump has designated April as the month of the first stage of the law, which includes reducing prison sentences for thousands of federal inmates, at a ceremony on Monday.
"We are a country that believes in redemption," said the president, noting that Americans with criminal histories are unemployed at a rate five times higher than the national average of 3.8% in February.
"You are going to have an incredible future," he added to the former detainees.
Trump said he wanted to follow through on criminal justice reform by helping federal inmates find jobs after they leave prison.
He stated that a "Second Step Act" would focus on "successful reintegration and reduced unemployment for Americans with criminal histories". Its goal is to reduce the unemployment rate of former single-digit prisoners to less than five years. The White House said Trump's budget proposed more than $ 500 million to help prisoners succeed after their release.
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Trump won a victory that eluded his predecessor, Barack Obama, by reducing long mandatory minimum sentences and other guidelines that for decades were held responsible for the disparate treatment of colored Americans, such as punishing imprisonment 18 times longer than cocaine powder.
The law also extends vocational training programs to reduce recidivism, increases the "precious time credits" earned by prisoners and relaxes the "three strikes" rule to allow judges to sentence repeat offenders to 25 years instead of obligatory life behind bars.
The president helped put pressure on Senate Republicans to pass the bill, and his son-in-law and high-level advisor, Jared Kushner, led the effort despite some conservative resistance.
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In December, the Criminal Justice Bill was overwhelmingly approved by a vote of 358 to 36 votes after passage in Senate 87-12.
Trump concluded at the ceremony: "In less than four months, more than 500 people sentenced to unjust punishment have been released from prison and are free to start a new life."
Associated Press contributed to this report.
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