A Turkish court sentenced the preacher to three years and one month in prison on charges related to terrorism and espionage, but suspended the rest of his jail time based on his time already served.
Mr Brunson was charged with links to Kurdish militants and supporters of Fethullah Gülen, the cleric blamed by Turkey for a failed coup attempt in 2016.
In July, after nearly two years in prison, Mr Brunson was moved to house arrest.
“His house arrest and ban on leaving the country has also been lifted," the privately-owned NTV news channel reports.The ruling paves the way for the 50-year-old's return to the United States.
Before the judge’s ruling, the evangelical pastor is reported to have told the court: “I am an innocent man. I love Jesus, I love Turkey.”
Mr Brunson, who has lived in Turkey for more than 20 years, preached in Izmir, a city on Turkey's Aegean coast near some of the sites of Christianity's first communities.
His detention was widely condemned and led to US placing tariffs on Turkey's ailing economy and a bitter diplomatic row between the two nations.
President Donald Trump reacted to news of Mr Brunson’s release on Twitter, saying: “My thoughts and prayers are with Pastor Brunson, and we hope to have him safely back home soon!”
Trump's evangelical base is likely welcome the victory ahead of his mid-terms and the release will also help smooth relations between Ankara and Washington.