His lawyer says an Iraqi court acquitted Ali Mussa Daqduq of involvement in the killing of five U.S. soldiers.
Lawyer Abdulalmehdi al-Mutiri says there were no charges against Daqduq in Iraq.
The fate of Daqduq became a source of tension between Baghdad and Washington last year as the U.S. military prepared to withdraw from Iraq.
Washington believes Daqduq was the mastermind of a 2007 raid on an American military base in the Iraqi holy Shi'ite city of Karbala that killed five U.S. soldiers.
Two Iraqi courts have found Daqduq not guilty and rejected the U.S. request to extradite the Hizballah militant.
There was no immediate comment from the U.S. Embassy in Baghdad.