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BBC News reports that he has been released under an amnesty, after being held by a militia in the town of Zintan, a mountainous western region, since 2011.
The Abu Bakr al-Siddiq Battalion has stated that the release happened on Friday, upon a request from the "interim government".
Despite the news of his release, he has not been seen in public yet. However, local reports have suggested that Saif is currently staying with relatives in the eastern city of Bayda.
Analysis by BBC states that Saif's release could present some problems to the country's unstable state.
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This is not the first time that there have been claims of his release by the media. The last report was in 2016, which the Zintan military denied.
Speaking with Reuters, a Zintan military source said, "We deny that Saif Islam has been released."
Saifwas caught in the desert while trying to flee the country in November 2011.
Since then, he has been held in Zintan by one of the factions that began contending for power after his father's death six years ago.
These Zintani forces have refused to hand Saif over to other authorities, despite Libya's new U.N.-backed unity government's guarantees that they would not let him escape.
He is wanted for several war crimes including killing protesters during the 2011 revolt.