The semi-official ISNA news agency reported on March 4 that the court ordered the six-year term of Ahmad Montazeri suspended at the request of an unidentified senior cleric.
The report said Montazeri had been released after agreeing not to "take any action against the regime."
In November, a court handed down the sentence after convicting Montazeri of antistate activity for releasing an audiotape of his father criticizing the execution of thousands of prisoners in 1988 under Ayatollah Ruhollah Khomeini.
Montazeri’s father, Ayatollah Hossein Montazeri, died in 2009. He was a close associate of Khomeini, the father of the country’s 1979 Islamic Revolution, before becoming an outspoken critic of Iran's ruling elite.