The Italian citizen Paolo Bosusco has been released, said S.K. Panda, a spokesman for the government of Orissa in eastern India.
"He is on his way to Bhubaneswar," the state capital, Panda said.
Bosusco was kidnapped with another Italian tourist, Claudio Colangelo, in the district of Kandhamal on March 14. Colangelo was set free 11 days later.
The guerillas also kidnapped Jhina Hikaka, a member of the state's legislative assembly who is still being detained.
Last week, authorities in Orissa agreed to release 27 prison inmates in exchange for the return of the abducted Italian man and the legislator.
Orissa's chief minister, Naveen Patnaik, specified that 23 prisoners would be freed to secure Hikaka's release, and the other four for Bosusco's.
The captors had set 13 demands, including the withdrawal of government troops from rebel strongholds in the state and the release of fellow Maoists and their supporters from jail.
Panda said Thursday that one of the prisoners, who the chief minister had promised to free in the exchange, has been released and others have been asked to file their bail applications.
Anti-rebel operations, part of a decades-long conflict, have already been put on hold in Kandhamal, officials said.
Maoist militants have been battling the Indian government in several eastern states since the late 1960s in an insurgency that has resulted in thousands of casualties. The group says it is fighting for the poor and the dispossessed.
In addition to targeting police, alleged police informers and "class enemies," the insurgents are believed to have carried out attacks on roads, bridges, railways, and power and telecommunication networks.
