An official at Nam Ha prison, south of the capital Hanoi, confirmed Binh's release.
Triet is scheduled to meet George Bush, the US president, on June 22, the first visit to the US by a post-war Vietnamese leader.
Pham Gia Khiem, Vietnam's foreign minister, had indicated during a visit to the US in March that the government might free Binh, who human rights groups have said was in poor health.
Since then, however, Vietnam has conducted several trials of other "dissidents".
State media reported that Binh had written a letter asking for clemency and expressed "his wish to be reunited with his family" and had "thanked the Nam Ha prison management for their care while he was serving his sentence".
Binh, a former journalist with Tap Chi Cong San, Vietnam's "Communist Journal", was accused of links with prominent overseas groups that oppose the communist government.
He had also taken part in an anti-corruption group and criticised the government in an online essay over a 1999 Vietnam-China border treaty, saying Vietnam had ceded land to the northern neighbour.
Binh had planned to create an alternative political party.
Family members said earlier this year that Binh's health had deteriorated due to liver disease and other ailments to such an extent that he could not lift his five-year-old daughter, according to the US-based Committee to Protect Journalists.
Vietnam has drawn US and EU protests this year for jailing a number of activists for "disseminating propaganda against the state", but the country says it does not punish people for the political views they hold, only for breaking the law.