Officials said yesterday they were "glad that David Bolam is safe and well after his ordeal and that he has been reunited with his family".
It did not give further details but Bolam was kidnapped by militants in May in Libya's second city Benghazi, much of which is under the control of Islamists.
Bolam is a teacher at the international school in Benghazi. A US teacher from the same school was shot dead in December.
The SITE intelligence group identified a video posted on YouTube last month of Bolam appealing for British Prime Minister David Cameron to help secure his release.
Libya has been sliding into chaos since longtime leader Moamer Kadhafi was toppled in an uprising three years ago, with interim authorities confronted by powerful militias that fought to oust him.
The cradle of the uprising against Kadhafi, Benghazi is now regularly the scene not only of fighting but also the murders of members of the security forces, political activists and journalists.