David Lin "has returned to the United States and now gets to see his family for the first time in nearly 20 years," a State Department spokesperson told AFP.
"We welcome David Lin's release from prison in the People's Republic of China," the spokesperson said.
In addition to Lin, China has detained a number of other US citizens on various charges including Kai Li, a businessman accused of spying in 2016.
Lin was jailed for life on charges of contract fraud, according to US media, though Washington has said he was wrongfully detained.
His daughter Alice Lin told Politico that her 68-year-old father would arrive in San Antonio, Texas on Sunday.
Various US officials have pushed for the release of Lin and others in recent years.
California Governor Gavin Newsom advocated for his freedom during a visit to China that included talks with President Xi Jinping and Foreign Minister Wang Yi last October.
The release comes ahead of a congressional hearing later this week on US citizens imprisoned in China.
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