Who are the leaders involved? Why were they jailed?
Out of the nine leaders who were jailed, the major figures were Oriol Junqueras, the former deputy leader of Catalonia, Raül Romeva, who had been in charge of foreign affairs for the former Catalan government, Joaquim Forn, the former Catalan minister of interior and Jordi Sànchez, who headed a pro-independence group.
However, the driving force behind the independence movement, the former Catalan president Carles Puidgemont fled to Belgium to avoid prosecution.
The leaders were arrested following the 2017 referendum that called for Catalonia to break away from Spain. The central government in Madrid deemed the vote illegal
All the nine jailed leaders were found guilty of sedition; four were also found guilty of misuse of public funds. The sentences ranged from 9 to 13 years.
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Jailed Catalan separatists leaders (from L) Jordi Sanchez, Oriol Junqueras, Jordi Turull, Joaquim Forn, Jordi Cuixart, Josep Rull and Raul Romeva pose inside Lledoners jail in Sant Joan de Vilatorrada, in 2018. Handout / Omnium Cultural / AFP
Why has Pedro Sanchez granted a pardon?
Addressing the nation on Tuesday the Spanish Prime minister said Spain needed to move on from the events of 2017.
Following February's regional elections in Catalonia more moderate pro-independence parties formed a government.
The new leader, Pere Aragonès, is proposing a dialogue with Madrid rather than pushing for a renewed referendum.
Releasing the jailed leaders could be seen as a show of good faith by the central government ahead of any talks.
What has been the response across Spain?
The majority of Spaniards outside of Catalonia believe the pardons are wrong.
A recent poll for Spanish newspaper El Mundo found that 61 percent did not agree with the decision.
Also, earlier this month tens of thousands of people, including the leaders of the three main right-wing parties rallied in Madrid to protest the move.
However, this may be a reflection of the extremely polarized nature of Spanish politics right now.