Former Royal Marine Alexander Blackman was jailed for life in 2013 for shooting the fighter at close range in Helmand Province on September 15, 2011, after the man was injured by helicopter fire.
The sentence was later reduced to eight years but a judge in March reduced this further to seven years, quashing the murder conviction and replacing it with one of manslaughter by diminished responsibility.
Blackman's lawyer Jonathan Goldberg told AFP that he was released overnight, while a statement from his campaign Facebook page said he was now in a "safe/private location with Claire", his wife.
In footage captured by a camera on another soldier's helmet, Blackman was heard to tell the injured Afghan fighter: "There you are. Shuffle off this mortal coil" -- paraphrasing Shakespeare.
"Obviously this doesn't go anywhere, fellas. I just broke the Geneva Convention," he told his fellow marines, a reference to international laws governing the treatment of prisoners of war.
His wife led a campaign to free him, saying he was suffering from combat stress disorder at the time, although the case has divided the country and the military.
Speaking to the Daily Mail newspaper while waiting for his release, Claire Blackman said: "I haven't slept all week. I feel like a child waiting for Christmas.
"We have had so many setbacks over the years that I almost cannot believe it is really going to happen this time. I can't wait to see him and spend some quality time together."
mc-ar/wdb
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