A statement confirmed 62-year-old Hyeon Soo Lim had been released on humanitarian grounds.
On Tuesday the Canadian government confirmed a delegation had arrived in Pyongyang to discuss Mr Lim's case.
The Toronto-based pastor, who is of South Korean origin, publically confessed to plotting to overthrow the North Korean government and set up a "religious state".
Mr Lim's family said he had travelled to Pyongyang in January 2015 to build a nursing home, nursery and orphanage.
His church confirmed he had visited the country more than 100 times since 1997.
How harsh are North Korean prisons?
North Korea country profile
Because religious activity is banned in North Korea, the authorities periodically detain foreigners for religious or missionary activity, and similar cases have seen staged public confessions from prisoners.
In an interview with CNN in January 2016, Mr Lim described his hard labour sentence. He said he had to dig holes eight hours a day in a camp where he did not see any other detainees.
In January US student Otto Warmbier died six days after being sent home on humanitarian grounds from North Korean imprisonment.
Following the American's death, Mr Lim's family increased their calls for Canadian Prime Minister Justin Trudeau to "change strategy" to help secure his release.
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