US-born journalist Roxana Saberi walked free from an Iranian jail on Monday after an appeal court cut her eight-year jail sentence for spying to a suspended two-year term.
Ms Saberi, a citizen of both the United States and Iran who moved to Iran six years ago, was arrested in January for working in Iran after her press credentials had expired.
She was later accused of espionage, a charge that can carry the death sentence, and convicted on 18 April.
One of Ms Saberi's defence lawyers, Saleh Nikbakht, told the ISNA news agency the court had acquitted her of spying but convicted her under a law covering offences including taking pictures or videos in areas where photography is banned.
She will be banned from doing any reporting work in Iran for five years, said her main lawyer, Abdolsamad Khorramshahi.
The United States had said the spying charges were baseless and demanded her immediate release. Tehran does not recognise dual nationality and told Washington not to interfere.
US Secretary of State Hillary Clinton said Washington was heartened by the news, though it still objected to Ms Saberi's espionage conviction.
Mrs Clinton said the journalist would leave Teheran to return to the United States in the coming days.
Iranian judiciary spokesman Alireza Jamshidi told state television that Ms Saberi, who has worked for the BBC and US National Public Radio, had confessed and apologised. "So the court reduced the sentence ... since it was her first offence."
Last week, her father said she had ended a two-week hunger strike and was "very weak". The judiciary denied she had refused food, and said she was in good health.
Roxana Saberi reported regularly for Radio New Zealand during her time in Tehran.