These are military prisoners, captured during an armed conflict. Why wouldn't the President have the authority to deal with them with as long as he doesn't contradict public law? That pesky Constitution.
From Article 1, Section 8. The Powers of Congress:
To define and punish Piracies and Felonies committed on the high Seas, and Offenses against the Law of Nations;
To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;
The President has no such authority.
I'm definitely not a constitutional lawyer, but I'd be surprised if a challenge to this EO based on a separation of powers argument would go anywhere. Unless there's a contradiction to the “Rules concerning Captures on Land and Water” made by Congress, I'd expect Holder's Justice Department to argue the EO is simply a means to carry out those rules.
That said, I have little doubt that the reviews are little more than a fig leaf to cover releasing more terrorist.