Estrada, 70, was granted an executive pardon by President Gloria Macapagal-Arroyo on Thursday, just a month after he was sentenced to life imprisonment for abuse of power and plunder.
In her decree, the president said Estrada was freed under the current administration's policy of releasing prisoners who had reached the age of 70. The six and a half years that he had already spent in detention during the trial was also taken into consideration.
The court had also confiscated $87 million dollars from his bank accounts - money said to have been amassed from payoffs from illegal gambling and bribes. Money held in Estrada's bank accounts before his election to president in 1998 will be returned to him, however.
Although Estrada's civil and political rights are to be fully restored, he has publicly stated that he will not pursue any form of political office.
Estrada won the 1998 presidential elections by the widest margin in the country's history, but was ousted during mass protests in January 2001, supported by the country's army and the church.