Khan, who has been treated for prostate cancer must, however, give 48 hours notice if he wants to leave Islamabad.
The Pakistani government says the restrictions that remain are for his own security.
However Hillary Clinton, the US secretary of state, said on Friday she was "very much concerned" about the decision to free Khan.
And Robert Gibbs, a White House spokesman, said that the US wanted "assurances" that Khan "is not involved or engaged in any of the activity that resulted in his house arrest earlier".
In July, a court had eased restrictions on Khan, allowing him to visit relatives in Pakistan but banning him from giving interviews on proliferation.
"It's a matter of joy. The judgment, by the grace of Allah, is good," Khan told reporters outside his house in Islamabad, soon after news of the high court ruling broke.
"It is because of this judgement that I am speaking to you," he said.
Pakistan has never allowed foreign investigators to question Khan, and regards the case as closed, but US and international nuclear experts investigating nuclear proliferation still want to speak to him.
"I will always be proud about what I did for Pakistan"
Abdul Qadeer Khan,
freed nuclear scientist
On January 12, Washington unveiled sanctions against Khan, 12 associates and three firms linked to his network forbidding them from having business dealings with the US government or private US firms.
The US state department said the move was aimed at making sure the network has been shut down entirely.
A UN nuclear watchdog report said last year that Khan's network had smuggled nuclear blueprints to Iran, Libya and North Korea and was active in 12 countries.
Khan said he was proud of what he had done for Pakistan, and that he had no need to answer to any foreign government.
"I will always be proud about what I did for Pakistan," he said.
"I am obliged to answer only to my government not to any foreigners."