Wang Xiaoning was freed early on Friday morning, his wife, Yu Ling, announced.
He who was detained in 2002, served his 10-year sentence in a Beijing jail.
Yahoo drew widespread criticism for providing information linking him to emails and political writings.
Yu Ling said her husband was in “good health and fine spirits” but was not allowed to give media interviews under the conditions of his release.
She could not comment on his experience in prison, she added.
Wang Xiaoning, a former engineer, was prosecuted after posting pro-democracy statements online calling for an end to one-party Communist rule. He was jailed for “incitement to subvert state power”.
The case raised questions about whether internet companies should co-operate with governments that repress freedom of speech.
A human rights group filed a lawsuit in the US on behalf of several plaintiffs, including Wang Xiaoning and a Chinese journalist, Shi Tao, who was also jailed for 10 years in 2005.
Yahoo later apologized and paid an undisclosed amount of compensation to the families involved.
It also told the US congress that the company had been legally obliged to provide the information.
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