He has never expressed remorse for his crimes, but he was released on "good behaviour" in accordance with the penal code during the time of his conviction.
He left the Aranjuez prison, north of Madrid, early on Saturday accompanied by two lawyers and his wife, after serving about 20 years - 10 years less than the maximum allowed under Spanish law.
The release sparked protest from victims' groups, who said it was "an insult to the judicial system and an affront to the victims of Eta".
Some reports have suggested that Chaos and his wife plan to live in the Basque seaside city of San Sebastian on the same street as families of those targeted
in Eta shootings and bombings.
In Madrid, about 200 people attended a demonstration called by the Association of the Victims of Terrorism, which laid 25 bouquets of flowers at the site where the 12 Civil Guards were killed.
In San Sebastian, dozens of people attended another ceremony to pay homage to the 25 victims of De Juana Chaos.
Demonstrators carried Spanish flags with black borders, and placards with a photograph of De Juana Chaos and the words "It's sickening".
Jose Luis Rodriguez Zapatero, the Spanish prime minister, said that the contempt shown for Chaos was "perfectly understandable", but emphasised that the law that allowed him to leave prison "must be respected".
Upon his release, Chaos had been expected to travel to San Sebastian, home to several of the families of his victims.
However, he failed to attend a ceremony there organised for him by pro-amnesty groups, citing security concerns, Spanish media said.
Prior to leaving prison the 52-year old was on hunger strike, his third since 2006, to protest against what he said was "harassment" by the media and by the judicial and prison authorities.
He complained about an investigation into his assets aimed at determining whether he can pay some of the €8m that judicial authorities have demanded he hand over to the families of his victims.
Prosecutors at Spain's anti-terrorist court are also seeking the seizure of a flat bought by his wife in San Sebastian.
Eta, whose initials stand for Euskadi ta Askatasuna, or Basque Homeland and Freedom in the Basque language, is considered a terrorist organisation by the EU and the US.
|Chaos, centre, was convicted of the murders of 25 people in 11 attacks [AFP]
On August 2, 1968, it staged its first targeted killing when three Eta members shot a high-ranking police officer outside his home in San Sebastian.
An Eta activist had shot and killed another police officer a few months earlier during an incident at a road checkpoint, but the killing had not been planned.
Its most recent victim was a policeman killed when a car bomb exploded in front of his barracks in the Basque Country on May 14.
Eta declared a unilateral ceasefire in March 2006, raising hopes for an end to the violence.
But a bombing at Madrid's airport in December 2006, which authorities blamed on Eta, killed two men and put an end to tentative peace talks with the government.
The group officially ended the ceasefire in June last year, and since then the Spanish authorities have taken a firm line against it, arresting dozens of its leaders and banning its political wing.