The truce is extended under the same conditions as the four-day ceasefire, a Hamas official says.
"We were celebrating, shouting out of joy."
Thirteen of the hostages were Israeli, three were Thai nationals and one was a person with Russian citizenship.
It comes after there was a brief disruption earlier to the deal to free captives was overcome with the mediation of Qatar and Egypt.
Hamas said the hostage releases would be delayed if Israel did not adhere to the agreed terms for the release of Palestinian prisoners.
The former Prime Minister believes Kiwis should be playing their part.
Nine hours after guns fell silent for the first time in seven weeks, the International Red Cross said it had begun an operation to facilitate the transfer of hostages.
It's the first pause in a 48-day-old war.
Israel and Palestinian Islamist group Hamas will start a four-day truce on Friday morning (local time).