Iran announced on Sunday that a national held in Italy had return home, shortly after Rome said it was seeking to revoke his arrest and extradition warrant.
Mohammad Abedini, 38, was arrested in Italy last month at the behest of the United States, which accused him of supplying sophisticated drone navigation technology to Iran's military, in violation of US sanctions.
"Esmaeil Baqaei, the spokesman of the Ministry of Foreign Affairs, announced the release of Mr. Mohammad Abedini Najafabadi, an Iranian citizen detained in Italy, and his return to his homeland," the ministry said in a statement.
The Iranian judiciary's official news agency Mizan Online has said earlier that Abedini would return to Tehran "in the coming hours".
The website said that following consultations between Iran's foreign and intelligence ministries and Italy's intelligence service, "the problem was resolved and led to his release and return".
US justice authorities alleged that the components supplied by Abedini were later used in a drone strike last January at a Jordanian military base near the Syrian border that killed three American service members.
Abedini has been held in a Milan jail since his arrest, with Iran denying the accusations and calling his detention an "illegal act" that risked damaging Rome-Tehran relations.
