The early release of Kazem Darabi, an Iranian, and Abbas Rhayel, a Lebanese, was authorized despite opposition from within Germany and abroad.
Rhayel was freed and deported from the country on Friday, said Frank Wallenta, a spokesman for federal prosecutors in Karlsruh.
Darabi and Rhayel were convicted of the 1992 assassination of four leading Iranian opposition figures in a Berlin restaurant.
Wallenta was unable to comment on Darabi's situation, but security officials in Berlin said Darabi had also been released and was on his way to Frankfurt International Airport, where he was to be put on a plane to Tehran later in the day.
The pair were freed under a law that allows the early release for foreigners who have served at least 15 years of their sentence. They had been held in pretrial custody for roughly five years, which counts towards their overall time served.
The Mykonos trial - so called for the restaurant where the killings took place - raised an uproar when a German court ruled that Iran's spiritual leader Ayatollah Ali Khamenei and then-President Hashemi Rafsanjani had ordered the murders. Both countries withdrew their ambassadors at the time.
Arad's family tried to halt release
The Arad family made a last-ditch effort to convince federal prosecutors in Germnay to condition the release of the two men on the release of information regarding Ron's fate from their countries.
Arad's brother, Chen, and daughter, Yuval, traveled to Germany in mid-October and held an inpromptu press conference at the prosecutors' office in Karlsruh.
After meeting with the general prosectuor Chen Arad said he respected her decision. "This is an Iranian operative who carried out an attack on German soil and who has already been sentenced. According to German law he is free to go after completing that sentence. There isn't any bargaining or deals here," he said.
"We came to see if his imprisonment could be extended because his fate is tied to that of Ron's. We came here to see if that could be done. The attorney general was not duty-bound to see us and hear us
out. She welcomed us graciously and showed goodwill.
"She serves the law and if German law dictates that they can be released, then they will be released. Bargaining chips come and go – only Ron never comes back. We will keep fighting in the hopes that his matter will be resolved."
Hagai Einav and AP contributed to this report