The 85-year-old ailing ex-President was taken from Cairo's Tora prison by medical helicopter, following a court ruling which ordered his release.
He was initially taken to a military hospital in Maadi, a suburb in southern Cairo, Al Jazeera reported.
A small crowd of supporters gathered outside the prison and cheered as the helicopter took off.
Meanwhile, the April 6 youth movement has called protests on Friday against his release.
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Mubarak still faces a retrial on charges of killing protesters during the 2011 revolution, and three other corruption cases as well.
But he has already spent more than two years in pre-trial detention, the maximum allowed under Egyptian law, and so the courts have ruled him eligible for release pending trial.
Hazem el-Beblawi, the prime minister, said last night that Mubarak would be placed under house arrest following his release. It was unclear where he would be held, in Cairo, at his villa in the resort city of Sharm el-Sheikh, or elsewhere.
Yesterday's Cairo court ruling ordering his release concerns the "Ahram gifts" case, in which Mubarak allegedly accepted USD 11 million worth of gifts, including jewelry and watches, from the state-run newspaper Al-Ahram.
He has already repaid the amount of the gifts, and the other defendants in the case have been released, suggesting that the charges against Mubarak could eventually be dropped.
Mubarak also faces charges of embezzling money from a fund earmarked for presidential palace renovations. A judge working on this case ordered his release on Monday, on the same procedural grounds. A separate charge accuses him of "illicit gains" during his presidency.