Later Hussein, an Iraqi, said: "I want to thank all the people working in AP ... I have spent two years in prison even though I was innocent. I thank everybody."
He was taken to meet tearful relatives and spoke to others on a mobile phone.
Yassir Hussein, Hussein's brother said in Baghdad: "I cannot describe my happiness at seeing him again.
"The family has been going through a hard time over the past two years, but now we thank God that we will have some rest."
The US military had accused Hussein of collaborating with Iraqi insurgents and detained him on April 12, 2006 in Ramadi, in the western Anbar province.
A Sunni Arab insurgency was taking place in the area at the time.
The authorities have never released any evidence against him.
AP consistently denied any inappropriate links, stating that he was undertaking standard war photography work.
Military authorities took the case to an Iraqi court in December for a possible trial.
However, an Iraqi judicial panel dropped all proceedings against him on April 9. He was freed under the country's amnesty laws, removing any implication of guilt.
A US military statement on Monday said that he was not a security threat.
Hussein's detention raised protests from human rights groups.
Joel Simon, the executive director of the Committee to Protect Journalists (CPJ), said: "He now joins a growing list of journalists detained in conflict zones by the US military for prolonged periods and eventually released without any charges or crimes ever substantiated against them.
"This deplorable practice should be of concern to all journalists. It basically allows the US military to remove journalists from the field, lock them up, and never be compelled to say why."
CPJ say that at least eight other Iraqi journalists are being held by US forces without being charged, for weeks and months.