"I believe it is time to cast off Virginia's troubled history of injustice and embrace a honest clean process of restoring the right of the these men and women," he said at a news conference on the Capitol steps in Richmond. "And so today, I will sign an order restoring the civil and voting rights of every single individual who has completed his or her sentence as of this day."
The executive order allows those who have served their time and completed their supervised probation or parole the right to vote, the right to run for office and the right to serve on a jury.
The governor said the move will bring greater equality among all Virginians.
"I believe our commonwealth can not achieve its full potential until all men and women act on this fundamental right and participate in the decisions about their own children's education, about their taxes and every aspect of their lives," he said. "Unfortunately, Virginia has had a long and sad history of effectively suppressing the voices of many thousands of men and women at the ballot box."
While the Voting Rights Act of 1965 aimed to expand voting rights to black Americans, McAuliffe said barriers continued to exist that made many Virginians, particularly minorities, ineligible to vote.
"Virginia continues to enforce one of the most restricting laws in the country regarding the restoration of voting and civil rights and individuals who have been convicted of felonies but who have completed their sentences and probation or parole," he said.
Republicans criticized the move on social media as a political stunt.
"STUNNING: @TerryMcAuliffe literally just gave murders and rapists the right to vote in Virginia," the Republican Party of Virginia's Twitter account tweeted.
The Virginia GOP's chairman, John Whitbeck, expressed concern with the move.
"Chairman @JohnWhitbeck: 'Mercy requires that we as Virginians be a Commonwealth of second chances. But there are limits,'" the GOP account tweeted.
"Blanket restoration, without regard to the nature of the crimes committed, doesn't speak of mercy. It speaks of political opportunism," the account tweeted.
But McAuliffe said when people have paid their debts, they should enjoy the benefits of citizenship.
"VA cannot achieve its full potential until all men and women are eligible for this fundamental right," the governor's account tweeted.
We will ensure everyone w/ freedom to live in our communities has the right to participate in the democratic process #VARoR," McAuliffe's account tweeted.