The guerrillas in an audio message received by some journalists here said in Telugu that the government has to free 29 prisoners to secure the release of 37-year-old Hikaka, who represents Laxmipur constituency.
The rebels, who initially wanted 30 prisoners to be freed, have announced they will not insist on the release of rebel leader Chenda Bhusanam alias Ghasi, who faces charges of killing more than 55 security personnel.
A Maoist leader who calls herself Aruna said the hostage will be handed over to a local legislator, Nihar Patnaik, and Hikaka's wife Kaushalya Majhi at Balipeta village of Koraput district if the 29 prisoners are freed by April 18 evening.
The new deadline from the rebels came days after the government said it cannot release Ghasi as he faces grievous charges.
Hikaka was kidnapped by the Andhra-Odisha border special zonal committee of the Communist Party of India-Maoist in his home district of Koraput March 24.
The Maoists had earlier announced an April 10 deadline for the government.
The government had appealed for the legislator's release, but there was no response from the rebels in the past few days.
The people whose release the rebels have sought in exchange for the legislator are mostly members of Chasi Mulia Adivasi Sangh (CMAS), an organization working in the southern parts of the state, including in Malkangiri and Koraput districts, on tribal-related issues.
The rebels said they had been booked on false charges. Police however say the organisation has Maoist support.