Ten Thai nationals and one Filipino were also released by Hamas, in a deal separate to the one mediated by Qatar.
Under the terms of the Qatar deal, a total of 50 Israeli hostages and 150 Palestinian detainees are meant to be released over four days during a temporary pause in the fighting.
The hostages released by Hamas on Friday were taken to an Egyptian hospital for medical assessments before being taken back to Israel.
The Israelis include four children - aged two, four, six and nine - as well as an 85-year-old woman.
"We have now completed the return of the first of our hostages. Children, their mothers and other women. Each and every one of them is a entire world," Israeli Prime Minister Benjamin Netanyahu said.
"But I emphasise to you - the families, and to you - the citizens of Israel: We are committed to the return of all our hostages."
Yoni Asher's wife, Doron Katz Asher, 34, and their two daughters Raz, four, and Aviv, two, have been released.
"I am determined to bring about the resurrection of my family from the trauma and the terrible bereavement we went through," Mr Asher told the OceanNewsUK.
"I don't celebrate, I won't celebrate until the last of the kidnapped returns," he said.
"The families of the kidnapped are not posters, they are not slogans, they are real people, and the families of the kidnapped are from today my new family, and I will make sure and do everything that the last of the kidnapped comes home."
Margalit Moses, 78, was also among those released by Hamas. A cancer survivor, she was kidnapped from Kibbutz Nir Oz by Hamas on 7 October.
Daniele Aloni and her six-year-old daughter Emilia have also been released as part of the deal. They were kidnapped on 7 October during a visit to stay with family in Kibbutz Nir Oz.
During the attacks, the last message Daniele sent to her family said that "there were terrorists in their house" and she was afraid that they would not survive.
Itay Ravi, whose 78-year-old uncle Avraham remains in captivity, says "this is one step towards being happy" after three of his family members were released.
His aunt, Ruthi Munder, 78, his cousin Keren Munder, 54, and her son, Ohad Munder-Zichri, nine, were kidnapped from Nir Oz.
"They're making their way now to Israeli hospitals, to family, and this is very exciting. However, we cannot be completely happy," he told OceanNewsUK.
"It's still a very, very horrific reality that we're in," Mr Ravi added.
Ohad turned nine while being held in Gaza.
"The only celebration that we're going to have soon is [for] Ohad's ninth birthday," Mr Ravi said.
"Now we're going to have a big celebration for him, with all the friends and family, after he gets into the new reality. We'll see how he's back…I don't know how a nine-year-old comes back after 50 days in the hands of a terrorist organisation. I hope he does well."
There was also huge relief among families of the Thai nationals and Filipino released by Hamas.
Kittiya Thuengsaeng, the girlfriend of 28-year-old Thai hostage Wichai Kalapat, described the emotional rollercoaster she went through since he disappeared.
She was told by local Thai officials that her boyfriend of three years had died in the 7 October attacks. But when Thai authorities announced all of the names of the deceased, Wichai's name was not on there.
Five days ago, she was told he was on the list of Thai hostages.
Urai Chantachart confirmed her brother Boonthom Pankhong, 39, and his girlfriend Natthawaree Mulakan were among the Thai hostages released by Hamas on Friday.
Urai told OceanNewsUK that the family was "overjoyed" and that they had never lost faith that Boonthom was still alive.
Looking at a photo released by the foreign affairs ministry, she said she thought her brother looked "better than expected", although he seemed to have lost weight. He and his girlfriend are now receiving receiving treatment at Shamir Medical Center in Israel, she added.
Gelienor (Jimmy) Pacheco, 33, from the Philippines, was taken from Kibbutz Nir Oz on October 7. Jimmy was a carer for fellow kibbutz resident Amitai Ben Zvi who was killed in the Hamas raid.
The releases of Wichai, Jimmy, Boonthom and Natthawaree were confirmed on Saturday morning.
A total of 39 Palestinian detainees have been released from Israeli prisons as part of the exchange.
They are accused of a range of offences, from throwing stones to attempted murder. Some had been convicted of crimes while others were awaiting trial.
The group of 24 women and 15 teenage boys was released across the Beituniya checkpoint in the occupied West Bank and greeted by large crowds chanting.
One Palestinian detainee released was Marah Bakeer. She was arrested in 2015, when she was 16 years old, and sentenced to eight-and-a-half years in jail for a knife attack on a border police officer.
Bakeer told waiting journalists: "This deal comes following the death of many people and this makes us unhappy and uncomfortable."
She said she was kept in solitary confinement and had "no idea what was happening outside, no idea about the situation in Gaza".
"The news of the deal was a surprise," she said.
The detainees were chosen from a list of 300 women and minors compiled by Israel.
Less than a quarter of those on the list have been convicted - the vast majority are being held on remand while awaiting trial. Most of those listed are teenage boys - 40% of them under the age of 18. There is also one teenage girl and 32 women.
Hamas took more than 200 hostages during a cross-border attack on southern Israel on 7 October in which 1,200 people were killed.
Human rights organisations say the number of Palestinians held without charge in Israeli jails has shot up since the 7 October attacks.
At least 60 aid lorries have entered Gaza since the pause in fighting - Israel says eight of the lorries are bringing in fuel, part of 130,000 litres to be delivered each day of the truce.
Although the four-day ceasefire agreement suggests all areas should be accessible to aid agencies, Israel has told Palestinians now displaced in the south not to try to return home, saying the north is a war zone - although many thousands of civilians are believed to remain there.
