Wang Youcai was released on Thursday on medical parole after pressure from Washington, a US-based human rights group said. He is expected to arrive in San Francisco this week.
"Mr Wang said goodbye to his family and accompanied by an official of the US government, departed Shanghai for medical treatment in the United States today," said John Kamm, director of the Dui Hua Foundation.
Wang, 37, was jailed in 1998 for 11 years as a founding member of the fledgling China Democracy Party (CDP).
"Wang Youcai's release comes after months of quiet diplomacy by the US State Department and the American Ambassador in China, Clark Randt, Jr, who has listed Wang as one of seven priority cases in his recent speeches," Kamm said.
His release comes ahead of the annual meeting of the UN Human Rights Commission this month.
Rights 'amendment' imminent
It also comes as China's annual session of parliament is about to rubber stamp a constitutional amendment calling for better human rights protections and follows a State Department report last week saying China's rights record is regressing.
"We welcome the release of Wang Youcai, but we caution taking this to be a positive step or a reflection of a new attitude by the Chinese government in tolerating dissent," Nicholas Becquelin, the Hong Kong-based director of Human Rights in China told AFP.
"Definitely what we are seeing is a new episode of hostage politics that China plays with Chinese dissidents in gaining diplomatic gains from the United States."
Becquelin added that China has repeatedly refused to respect international norms by barring political dissidents from return to their homeland and refusing to renew their valid passports.
Democracy activists arrested
Wang was arrested with other leading democracy activists Xu Wenli and Qin Yongmin in mid 1998 after they had publicly established the CDP only days after China signed onto the UN
Covenant on Civil and Political Rights.
By the end of the year, all three were convicted of subversion and sentenced to prison terms of up to 13 years.
Scores of other party members are still in Chinese jails.
Xu, a veteran dissident who earlier served 13 years following China's 1979 Democracy Wall period, was released on medical parole to the United States following extensive international pressure in December 2002.
Wang was also previously jailed for his role in the 1989 Tiananmen democracy protests, when he was a student leader representing Beijing University.
During his incarceration, Wang reportedly suffered from bronchial disorders, tracheitis and heart disease, ailments that led to his release, Dui Hua said.
The Dui Hua Foundation has worked to free Chinese political prisoners and has established a dialogue mechanism with the Chinese government that has helped in the release of several dissidents.