Nepali (54) was released from Patiala Central jail at round 6.30 pm today, with a stamp on his wrist, which entitles him to free train journey till Gorakhpur enroute to his native place in Nepal.
Soon after his release, Nepali told reporters that he was not involved in the hijacking.
Punjab and Haryana High Court had in February exonerated him and another accused, Dilip Kumar Bhujel, of murder, hijacking and other offences on grounds that CBI failed to prove their "active participation" in the plot to capture the plane.
CBI had named 10 accused, including seven Pakistanis, for conspiring and executing the hijacking. Bhujel and Abdul Latif Adam Momin, were Indians, while Yusuf Nepali was from Nepal.
Bhujel, Momin and Nepali were charged with providing logistical support to the main accused.
A special CBI court at Patiala on February 5, 2008, had convicted Nepali, Bhujel and Momin for their involvement in hijacking and awarded them life imprisonment.
However, the CBI had approached the High Court seeking death sentence for Momin, which the court rejected on grounds of prolonged custody of Momin, who has been in jail since 1999 after he and Nepali were arrested in Mumbai during probe into a bank robbery.
The High Court exonerated Nepali and Bhujel, but held them guilty under Section 25 of the Arms Act. Nepali was also levied a fine of Rs 3,000 by the court.
However, Nepali, who claims to be from a very poor background, was unable to pay the amount following which the inmates of Patiala Central jail pooled in money to pay the fine.
A day after he was supposed to be released, Nepali walked out of jail today after 14 years of imprisonment, saying he did not know who would compensate his time in jail.
"During these 14 years, my parents died and my wife left me in hours of crises," he said.
Bhujel, who was also exonerated along with Nepali, had been shifted to a jail in West Bengal in 2009.