Peter Cardenas Schulte, of Tupac Amaru Revolutionary Movement (MRTA), had been held at a high-security prison at the naval base in the port of Callao, east of Lima, after being convicted of terrorism.
It is the same prison where MRTA leader Victor Polay and founder of the Shining Path rebel group, Abimael Guzman, are serving life sentences.
Cardenas, who is about 65, released yesterday was sentenced to 25 years as a leader of the MRTA, a guerrilla group that resorted to kidnapping in the 1980s to finance its armed actions.
But the group has virtually disappeared in recent years.
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Cardenas, who used the alias "Comrade Alfonso," had been jailed since April 14, 1992, after being detained by security forces during the government of President Alberto Fujimori. His sentence was reduced by 18 months for previous time served.
A former police chief, General John Caro, told Canal N that Cardenas was one of the cruelest terrorists in Peru in the 1980s and early 1990s.