Zhao was accused of leaking state secrets after the New York Times reported that Jiang Zemin, the former Chinese president, was about to resign as head of the central military commission, which he did shortly afterwards.
 
Jiang's retirement, while widely expected, was a closely guarded secret.
 
Fraud charge
 
Zhao was accused of telling the newspaper about claims of rivalry between Jiang and his successor Hu Jintao. Zhao and the New York Times have always denied the charges.
 
He was found not guilty on of leaking state secrets but convicted for allegedly receiving $2,660 from a farmer while working for a newspaper in northeast China's Jilin province in 2001 – a charge he also denied.
 
His sister, Zhao Kun, said the charges were an "excuse" to imprison her brother.
 
Zhao's case sparked diplomatic rows between China and the US, with Washington repeatedly calling on Beijing to release him.
 
International human rights groups had also demanded his release.
 
Investigative past
 
Reporters Without Borders said on Friday that Zhao should have all his rights restored, including the right to work as a journalist.
 
China holds 35 journalists and 51 cyber-dissidents in prison "just for exercising their right to inform", according to the group.
 
Bill Keller, the executive editor of the New York Times, said he was delighted Zhao was free after three years in prison.
 
"We have said all along that Mr Zhao is an honorable, hard-working reporter whose only offence seems to have been practicing journalism," he said.
 
Before joining the Times in 2004, Zhao was an investigative reporter for Chinese publications and wrote about official corruption and abuses in the countryside.