British-born environmentalist Morad Tahbaz has been released from a Tehran prison on bail with an electronic bracelet.
The 66-year-old’s lawyer has said he has been “granted furlough” and will be staying at his family’s home in the Iran capital.
Mr Tahbaz, a wildlife conservationist, has an American passport and was arrested in 2018 and sentenced to 10 years for working as a spy for the US.
Iran does not recognise dual nationality and has arrested dozens of dual nationals and foreigners in recent years, mostly on espionage charges. This included Nazanin Zaghawi-Ratcliffe - a British-Iran national, who was released in March. That same month Mr Tahbaz was put on furlough but then returned to prison.
Iran has been accused of using citizens as bargaining chips, but Tehran has denied trying to gain political advantage in this way.
The release of Mr Tahbaz comes a day after the European Union's foreign policy lead Josep Borrell proposed to revive the 2015 Iran nuclear deal which Donald Trump put an end to when he was US president.
A Foreign Office statement read: “The Tahbaz family have confirmed Morad has been released from Evin prison on furlough and is at their home in Tehran.
"Morad is a tri-national and we continue to work closely with the United States to urge the Iranian authorities to permanently release him and allow his departure from Iran."
Amnesty International added: “It is a matter of grave concern that British nationals continue to be held arbitrarily by the Iranian authorities like this.”