A Russian defence ministry official also confirmed that Russian troops had closed down all six of their checkpoints in the buffer zone around South Ossetia.
Dmitry Medvedev, the Russian president, had said the withdrawal would be completed by midnight, ahead of a Friday deadline contained in a ceasefire deal brokered by France on behalf of the EU.
The zones were created outside the two regions, which have unilaterally broken away from Georgia, after Russia sent tanks and troops to repel a Georgian offensive to retake South Ossetia in August.
Russia plans to keep 7,600 troops in the separatist regions, which it recognised as independent states after the war.
Russia's counter-offensive against its former Soviet neighbour drew condemnation from the European Union and the US, and deepened fears over the security of the Caucasus as a transit route for oil and gas from the Caspian Sea to western Europe, bypassing Russia.
"I am pleased that Russia appears to be fulfilling its obligation under the ceasefire to withdraw in compliance with Friday's deadline in Georgia," Robert Gates, the US defence secretary, said on the sidelines of a meeting of defence ministers in Macedonia.
Russia said the focus would shift to international talks in Geneva on October 15, where it will call for an embargo on the sale of offensive weapons to Tbilisi, and for a security mechanism around Abkhazia and South Ossetia to prevent Georgian attacks.
"In these areas adjacent to South Ossetia and Abkhazia a special regime should be established that will not allow anyone to carry out provocations," Sergei Lavrov, the foreign minister, said in Moscow.