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Shah was arrested in February while leading protests against the killing of two students and was later booked under the Public Safety Act.
The state government had ordered Shah's parole last month to attend to his ailing mother after she suffered a cardiac arrest. However, the separatist leader rejected the parole.
Shah's release this time has no condition attached to it.
After his release, Shah said that the team of Centre-appointed interlocutors to Jammu and Kashmir had come see him in jail. "However, I refused to see them," he added.
The interlocutors had met his mother on their maiden visit to the Valley last month after their appointment and had offered to open a dialogue with all sections of the society in the Valley.