The sudden change of mind by Biden who is set to leave office early next year comes amid his earlier stand that he would not give him clemency.
In September, the White House press secretary said that Biden would not issue a pardon for his son.
But, according to Biden "politics has infected this process and it led to a miscarriage of justice".
"From the day I took office, I said I would not interfere with the Justice Department’s decision-making, and I kept my word even as I have watched my son being selectively, and unfairly, prosecuted," he said.
"I hope Americans will understand why a father and a President would come to this decision," he said.
Reacting to this, Hunter, 54, regretted making mistakes stating that this had been "exploited to publicly humiliate and shame" his family.
"I will never take the clemency I have been given today for granted and will devote the life I have rebuilt to helping those who are still sick and suffering," he said.
What does it mean?
A presidential pardon is a legal act in which the President of the US grants forgiveness to someone for a federal crime, effectively removing any punishments.
The pardon of Hunter means that any criminal charges or potential convictions against him would be forgiven, and he would no longer face penalties or legal consequences for those charges.
It covers convictions in two cases in Delaware and California.
This also includes any other “offences against the US which he has committed or may have committed or taken part in during the period from January 1, 2014 through December 1, 2024".
Hunter was convicted in June for lying on a federal form when he purchased a gun in 2018 and swore that he was not a drug user.
Just months later, he pleaded guilty to charges accusing him of a scheme to avoid paying at least $1.4 million (Sh182 million) in taxes.
It does not, however, erase the record of the offence itself but shields him from future prosecution for the crimes involved.
The US Constitution gives the president powers to grant clemency, which includes both pardons and commutations.
A pardon forgives federal criminal offences; a commutation reduces penalties but is not as sweeping.
But, a president can only grant pardons for federal offences, not state ones.
Impeachment convictions also are not pardonable.
