Byron Disrael Lima Estrada was freed for good behavior after serving 11 years for his conviction in the murder of Bishop Juan Jose Gerardi.
The 80-year-old former soldier had been hospitalized the past seven years.
Archdiocese spokesman Nery Rodenas says the church received formal notification of the release Friday.
Gerardi was slain in April 1998, two days after releasing a report on abuses of power during the civil war.
Many of the abuses were blamed on the army.