Dubbed the "bikini killer" in Thailand, and "The Serpent", for his evasion of police and use of disguises, Sobhraj, 78, a French national, is suspected of killing more than 20 western backpackers on the "hippie trail" through Asia.
His notoriety and exploits have been the subject of several dramatisations, including a Netflix and BBC joint production released last year.
Sobhraj was expected to be taken from jail to the immigration department in the capital Kathmandu to complete his paperwork and enable him to return to France.
Nepal's Supreme Court on Wednesday ordered his release from prison, citing his age. He was expected to be out of jail on Thursday, but pre-release procedures, including a health check-up, have caused delays, Ishwari Prasad Pandey, a jailor at the Central Jail in Kathmandu told Reuters late on Thursday.
Sobhraj has been held in a high-security prison in Nepal since 2003, when he was arrested on charges of murdering American backpacker Connie Jo Bronzich in 1975, and has served 19 years out of a 20-year sentence.
"I'm happy and have great respect for our judiciary and Supreme court," Sobhraj's mother-in-law Sakuntala Thapa told Reuters partner ANI after news of his release was announced on Friday.
Sobhraj married Nihita Biswas, a Nepali national and a woman 44 years his junior, in 2008.
He denied killing the American woman and his lawyers said the charge against him was based on assumption.
Several years later Sobhraj was also found guilty of killing Bronzich's Canadian friend, Laurent Carriere.
But he was suspected of many more murders, including in Thailand, where police say he allegedly drugged and killed six women in the 1970s, some of whom turned up dead on a beach near the resort of Pattaya.
He was jailed in India for poisoning a group of French tourists in the capital, New Delhi, in 1976, before he could stand trial on the charges against him in Thailand.
Sobhraj escaped from India's Tihar jail in 1986 after drugging prison guards with cookies and cakes laced with sleeping pills.
Police nabbed Sobhraj days later in the Indian beach holiday state of Goa.
"I walked up to their table and said 'you are Charles'", Madhukar Zende, the policeman who caught him in Goa, told The Indian Express newspaper in an interview published on Friday.
A statue of Sobhraj, in his signature peaked cap, stands at the restaurant in Goa to this day. He was jailed in India until 1997 when he returned to France.
Associates have described him as a con artist, a seducer, a robber and a murderer.
His true number of victims is unknown.
"Jail authorities will hand him over to the department of immigration today," Sobhraj's lawyer, Gopal Shivakoti Chintan told Reuters earlier on Friday.
"Then the necessary process will be completed by the immigration officials to return him to his country."
