Mahir Arar was due to go on trial in Damascus on charges of having links to terrorism, but Canadian Foreign Minister Bill Graham told reporters on Sunday that Arar would be returning to Canada.
"He was released into the custody of our consular officials today by the Syrian authorities," Graham said, adding that Arar was in good health.
Arar, a Syrian-born Canadian was detained in New York’s John F Kennedy airport on his way back to Canada after a business trip.
He was deported to Syria, prompting a formal protest by Ottawa to Washington.
Arar was accused by Damascus of belonging to a “terrorist organisation” which Canadian authorities believed referred to the Syrian Muslim Brotherhood.
Last visit in 1988
But Arar had not visited Syria since immigrating to Canada as a 17-year-old in 1988.
"I don't think it would have been done any more quickly by screaming and yelling"
Canadian foreign minister
Graham said constant diplomatic pressure had helped secure Arar’s release.
"I don't think it would have been done any more quickly by screaming and yelling," he said.
But Graham had been criticised by opposition politicians for not imposing diplomatic sanctions against Syria over the matter.
Analysts say Arar’s release will relieve some pressure from Ottawa, which has been under recent fire for not doing enough to protect Canadians overseas.
Canadian businessman William Sampson spent more than two years in a Saudi jail facing the death sentence for murder. Released in August of this year, Sampson said he was regularly tortured during his imprisonment.