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Foreign Secretary William Hague said the documents, which detail how detainees were castrated, beaten and sexually abused while in British camps, should now be made public.
His announcement comes as a High Court judge is set to decide whether the UK Government, which sanctioned "systematic violence" in the detention camps, is liable for the torture of the Mau Mau people between 1952 and 1961.
Last month, the High Court heard how Ndiku Mutua, Paulo Nzili, Wambugu Wa Nyingi and Jane Muthoni Mara, who are in their 70s and 80s, were subjected to appalling abuse at the hands of the British authorities.
Mr Mutua and Mr Nzili were castrated while Mr Nyingi was beaten unconscious during an incident in which 11 men were clubbed to death. Mrs Mara was also subjected to horrendous sexual abuse during her detention.
All four want the British Government to issue a "statement of regret" and pay around £2 million into a welfare fund for the hundreds of victims still alive.
The Government's lawyers claim that it is the Kenyan government which is now responsible, while arguing that there has been such a delay since the atrocities occurred it can no longer be held accountable.
But the Kenyans' legal team at Leigh Day say they have only been able to bring the case now because of recent historical research and officials at the FCO finally releasing some of the 1,500 files relating to the abuse of the Mau Mau people and their supporters.
The Government has also admitted there are some 8,800 files which were transferred to the UK when the British authorities withdrew from the colonies.
Following the revelation in January, Mr Hague requested former British High Commissioner to Canada Anthony Cary conduct an internal review into what happened to the documents, known as "migrated archives", when the British left Kenya.
Mr Cary said he found there was confusion about the status of the files although some officials at the FCO realised their importance but chose to "ignore" their existence following three Freedom of Information requests from the Kenyans' lawyers in 2005 and 2006.
Mr Cary said: "Lack of process documentation and misunderstandings about the importance and searchability of the archives explain the failure only up to a point.
"I think it is fair to say these misapprehensions were only half believed, at least by some of the more thoughtful and knowledgeable staff (at the Foreign Office).
"It was perhaps convenient to accept the assurances of predecessors that the migrated archives were administrative and/or ephemeral, and did not need to be consulted for the purposes of FOI requests, while also being conscious of the files as a sort of guilty secret, of uncertain status and in the 'too difficult' tray."
Adding that officials at the Foreign Office need urgently to review all its documents, the former British High Commissioner said: "The migrated archives saga reminds us that we cannot turn a blind eye to any of our holdings.
"All information held by the FCO should have been retained by choice rather than inertia, and must be effectively managed from a risk perspective."
Daniel Leader, counsel for Leigh Day, said the report was significant because if the High Court rules that the British Government is liable it cannot legitimately claim there was a time lag in bringing the case because it withheld crucial documents needed by his team.
He added the Government's lawyers should also not worry about setting a precedent by paying compensation because there would be only a handful of people still alive who would have a claim for being tortured while living in a British colony.
"Firstly, it's clear that the Foreign and Commonwealth Office knew about these documents for a very long time," he added.
"It's not just a case that they found them behind the sofa, it was their 'guilty secret'.
"Following on from that, this could potentially lead to a wholesale change of our understanding of colonial history and that could have ramifications politically.
"And it also questions how the Government is dealing with FOI requests given that it is clear that the FCO chose to ignore a vast archive of highly sensitive documents when specific requests were made."
In a written ministerial statement released last Thursday, Mr Hague said it was now time to make the files relating to the Mau Mau Uprising public "subject only to legal exemptions".
He said he was committed to ensuring the "full implementation" of Mr Cary's report.
"I believe that is the right thing to do for the information in these files now to be properly examined and recorded and made public through the National Archives," he added.
"This will be taken forward rapidly. Given the size of the archive the process may take some time to complete in full."
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