The release of Baxtiyar Haciyev comes on the eve of U.S. State Secretary Hillary Clinton's scheduled visit to Baku on June 6.
The move was welcomed by the OSCE's representative on freedom of the media, Dunja Mijatovic, who was quoted in a statement as saying she hoped Baku would release all imprisoned journalists.
“The decision to release Haciyev is a positive step. However, the authorities could do more to foster freedom of expression by liberating all imprisoned journalists. I look forward to hearing more good news from Azerbaijan in the near future,” Mijatovic said.
Haciyev, 30, is a former parliamentary candidate and a graduate of Harvard University.
He was arrested in March 2011 ahead of a planned demonstration against the Azerbaijani government that he helped organize.
In May 2011, he was convicted on charges of evading military service and sentenced to two years in prison.
Haciyev has denied any wrongdoing.
Last month, a bipartisan group of U.S. senators urged Azerbaijan to release Haciyev, calling his arrest “cruel treatment” and a breach of rights to freedom of expression and association.