The Iranian Embassy in Ireland has confirmed Bernard Phelan has been released from prison.
The Department of Foreign Affairs has welcomed the news, saying he "is now on his way home to his family."
64-year-old Bernard Phelan was arrested while taking pictures of a mosque last October.
He was initially sentenced to three and a half years, but it was increased to six and a half, with no explanation.
His arrest came during protests against the Iranian regime.
The Tipperary native's health began to deteriorate in March, with his family calling for his immediate release.
Their calls have been answered, confirmed in a tweet posted by the Iranian Embassy in Ireland.
It read: "Constructive diplomatic engagement between Iran and Ireland has resulted in pardoning and releasing of the Irish citizen, Bernard Phelan, on consular and humanitarian grounds."
Tánaiste and Foreign Affairs Minister, Micheál Martin, says "many people have worked tirelessly for this outcome over many months."
He added: "The last seven months have been a very difficult ordeal for Bernard and for his family and I am pleased and relieved that this is now at an end."