Bashir was picked up by his family and driven to his home in Central Java, a spokeswoman for the Directorate-General for Corrections at the Ministry of Justice and Human Rights said.
Photographs showed him wearing a white robe, a white cap and a face mask as he left Bogor prison, south of Jakarta.
“Abu Bakar Bashir was released from Gunung Sindur Prison at 5:30 am,” spokeswoman Rika Aprianti told reporters, adding that he was healthy upon his departure.
Bashir, 82, who is believed to be the spiritual leader of Jemaah Islamiah (JI), a jihadist network linked to al-Qaeda, was imprisoned for 15 years in 2011 for his links to a militant training camp in Aceh province.
After receiving periodic reductions in his prison term, he served a 10-year sentence.
Although Indonesian police and Western intelligence say that Bashir was linked to the Bali attacks that killed 202 people and a 2003 attack on the JW Marriott hotel in Jakarta, he was never convicted of them and denied those ties.
The Bali bombings killed 88 Australians, and Foreign Minister Marise Payne said this week that Indonesia must ensure that Bashir does not incite more violence.
Thiolina Marpaung, an Indonesian injured in the 2002 attacks, said she wanted authorities to monitor Bashir.
“We don’t know what he did in prison,” she said over the phone. “The government still needs to control terrorist actors in Indonesia who have been out of prison.”
Bashir pledged allegiance to the Islamic State in 2014 while in prison.
Eddy Hartono, of the Indonesian anti-terrorism agency, said Bashir would now undergo a deradicalization program.
“We hope that after he is free, Abu Bakar Bashir will be able to preach peaceful, restful preaching,” he said in a statement.
In the aftermath of the Bali attacks and with support from Australia and the United States, Indonesia established an elite anti-terrorist unit that weakened JI and resulted in the arrest or murder of dozens of suspected militants.
But since then, other extremist groups have formed and carried out attacks in the world’s largest Muslim-majority country, and last month police arrested 23 militants, including Zulkarnaen.
Abdul Rohim, Bashir’s son, told Reuters prior to the release that his father would return to Al Mukmin Islamic boarding school near Solo in Central Java province, which Bashir founded in the 1970s and whose graduates have in the past have been associated with militant networks and attacks.
“He has completed his term of office. This is purely over, ”said Rohim, adding that he would lead the Islamic preaching work.
Security analysts say that while Bashir doesn’t wield as much power over JI or other groups, he could still influence other militants.
“Bashir is an ideologue, his words will be followed and examples will be made,” said analyst Stanislaus Riyanta.