The American Christian, who was jailed for his faith three years ago, has been released as part of an exchange.
He was one of four Americans imprisoned in Iran who were exchanged for seven Iranians held or charged in the United States.
US officials said the four - Washington Post reporter Jason Rezaian, former US Marine Amir Hekmati, Pastor Saeed Abedini and Nosratollah Khosravi-Roodsari - were to be flown from Iran to Switzerland on a Swiss plane and then brought to a US military hospital in Landstuhl, Germany, for medical treatment.
In return, America will either pardon or drop charges against seven Iranians - six of them dual citizens - accused or convicted of breaking US sanctions. The US will also drop Interpol "red notices" - essentially arrest warrants - on a handful of Iranian fugitives.
The release comes as America and Europe lift sanctions against Iran after the United Nations nuclear agency confirmed that the Islamic republic had met all its commitments under a breakthrough deal.
US secretary of state John Kerry said the deal marks "the first day of a safer world"
"This evening we are really reminded once again of diplomacy's power to tackle significant challenges," he said in Vienna.
Pastor Abedini was sentenced to 8 years in an Iranian prison for "attempting to sway Iranian youth away from Islam" and creating house churches. He has been detained since 2012.
His family had repeatedly raised fears amid a continuous threat to his life from fellow inmates.
They spoke of his deteriorating health, after being denied medical attention for the injuries he sustained from the beatings of inmates and prison authorities.
In September the pastor's wife, Naghmeh Abedini said intelligence officers repeatedly used Taser electric shock guns on him.
Mrs Abedini said he was tortured during an interrogation session and was in need of medical treatment.
"When will this nightmare end?" She said.
Todd Daniels, Regional Manager for the Middle East at International Christian Concern, said: "We are rejoicing this morning with the Abedini family and Christians around the world over the release of Pastor Saeed from prison after more than three years solely for his faith.
"This is a huge day of celebration and the culmination of many long efforts of advocacy on his behalf.
"We are grateful for the efforts of the U.S. State Department and other entities involved in this case. We also rejoice with the global body of Christ who have prayed and spoken on Saeed's behalf in so many ways.
"We urge the Iranian government to continue to take steps to not only release American citizens but to protect the basic rights of their own citizens.
"Iranians of all faiths should be free to believe as they will and meet with others who share those beliefs, including the very same beliefs for which Pastor Saeed was imprisoned. The efforts on behalf of persecuted Christians, both in Iran and around the world, have not stopped."
