Hossain was released from Dum Dum central jail this evening and he will be sent back to Bangladesh soon, a senior government official said.
The Bangladeshi national was wanted in his country for the killing of seven people in Narayanganj district adjacent to Dhaka.
The release of Hossain, who was ordered to be deported to Bangladesh by a court in Kolkata last month y December 15, came a day after Chetia was handed over to India by Bangladesh.
He, however, said this should not be seen as a quid pro co and "Chetia had been handed over to India as per his own wish".
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The seven massacre victims were first kidnapped by assailants from river port city of Narayanganj on April 27, 2014 and their nearly decomposed bodies were retrieved from the Shitalakya river five days later.
It had embarrassed Prime Minister Sheikh Hasina's government because Hossain is a local Awami League leader and prompted it to immediately sack two army and navy officers.
Hossain and two other Bangladeshi nationals were arrested on June 15 in Kolkata for not having valid documents for entering India. All three are currently in police custody.
Bangladesh had handed over banned ULFA's founder member Chetia yesterday to India.