Hundreds of post office operators convicted on charges including false accounting, theft and fraud are set to be exonerated by an unprecedented act of parliament.

The moment will be marked by the release of an open letter to all the affected operators, followed by individual letters containing assurances that their names will be removed from police databases, according to the government.

Over two decades, branch operators were hounded for money, jailed and even pushed to suicide by the actions of the Post Office.

Royal assent was due to be given on Friday evening to the act that overturns convictions of theft, fraud, false accounting, money laundering and other offences related to the Horizon IT scandal.

The bill covers prosecutions brought by the Post Office and the Crown Prosecution Service in England and Wales for offences committed between 23 September 1996 and 31 December 2018.

Similar legislation has been tabled in Scotland, but there is no timetable yet for it to be passed. Those who have failed to get their convictions overturned at the court of appeal will not be covered.

There have been more than 900 convictions linked to the scandal, which involved operators being wrongfully prosecuted due to a faulty computer system, known as Horizon. The system showed erroneous shortfalls on accounts, which the Post Office then demanded operators cover on penalty of suspension and prosecution. This led to bankruptcies, health problems, family breakdowns and suicides.

Only 103 convictions have been quashed through the court system so far. This includes 10 cases in which the Post Office was not the prosecutor.

The Law Society has sought assurances from the government that the act of parliament will not set a precedent given that some see it as transgressing the independence of the courts.

Nick Emmerson, the president of the Law Society of England and Wales, said: “We are pleased that postmasters and others affected by the Post Office/Horizon scandal now have their convictions quashed and can gain access to compensation schemes.

“We reiterate that a piece of legislation as constitutionally significant as this required adequate parliamentary scrutiny time. This bill has now been pushed through both houses at pace and the Law Society remains concerned that it could set a precedent for parliamentary intervention in the justice system.”

Post office operators who have their convictions quashed can receive a fixed compensation payment totalling £600,000, or choose to have their case considered on an individual basis. They are eligible to receive an interim payment of £163,000 within 28 days of applying.

The government is also extending compensation to those who were never convicted or took part in legal action against the Post Office, making them eligible for a £75,000 redress payment.

More than £43m has been paid in compensation so far, including 41 full and final settlements, but the total cost of compensation is expected to exceed £1bn.

The creator of the Horizon software, Fujitsu, has said it will contribute to the compensation scheme once the public inquiry is complete.

The Post Office (Horizon system) offences bill was one of the final pieces of legislation to be pushed through before the general election.