The postgraduate student from Durham University has been in custody since May. Hedges' wife has welcomed the news and says she "cannot wait" to have him home.
The United Arab Emirates has pardoned British student Matthew Hedges almost a week after a court sentenced him to life in prison for spying.
Hedges, 31, has been in custody since May 5 after being arrested at Dubai airport. Emirati authorities accused Hedges of spying, whereas Hedges maintained he was carrying out research for his academic studies.
"The presidential pardon for Matt is the best news we could have received," Hedges' wife, Daniela, said in a statement to Euronews. "That he is returning home to me and the rest of his family is much more than I was ever expecting to happen this week."
British Foreign Secretary Jeremy Hunt said on Monday morning he was "grateful to the UAE for resolving the issue speedily."
"We don't think this should have ever happened," he added in a later video statement. "But given that it did, the took the measures necessary to make sure that a great injustice wasn't done, and we are grateful to them for that."
The pardon for Hedges was just one of 785 made by President Sheikh Khalifa bin Zayed al-Nahyan on Monday as part of the UAE's 47th National Day, and was issued with "immediate effect."
"The release of prisoners comes within the framework of His Highness the President's keenness to give [the prisoners] the opportunity to start a new life and alleviate the suffering of the families," a statement from the UAE foreign ministry said.
Durham University, where Hedges is undertaking his postgraduate studies, said it was "absolutely delighted" to hear the latest news.
"We will continue to offer Matt's family our full support in the aftermath of this traumatic ordeal and we will be thrilled to welcome him back to the Durham University community," Professor Stuart Corbridge added.