Sobhraj was driven out of Central Jail in Kathmandu by a cavalcade of police cars a little after midday on Friday, said Ishwari Prasad Pandey, a jailor at the Central Jail.
Dubbed the "bikini killer" in Thailand, and "The Serpent", for his evasion of police and use of disguises, the French national, 78, 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, wearing a woollen cap and a blue fleece jacket, was escorted to Nepal's immigration department by a group of at least seven policemen, some of them in flak jackets. He is expected to return to France, his lawyer Gopal Shivakoti Chintan said earlier on Friday.
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, had caused delays, Pandey said.
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.
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, spanning decades and several countries, is unknown.
