The High Court has ordered the immediate release of Alexandr Malik, who was awaiting extradition to the Czech Republic.
The court heard that the Czech president had granted an amnesty to a third of its prisoners.
Mr Justice Colm MacEochaidh said that the State had spent "significant resources" and had been put to the trouble of complying with the request of the Czech authorities who then "changed their mind".
The judge granted the release of 40-year-old Mr Malik, who had been living in Ireland since 2008.
He was arrested and detained in May 2012 and his surrender to the Czech Republic was ordered by the High Court on 20 December.
The High Court heard that he had been convicted in his absence on a charge relating to loan fraud in 2008 and had been sentenced to two years in prison.
He was extradited with a guarantee that he would be granted a re-trial as he was contesting the charge, the court heard.
Mr Malik, who had lived in Co Meath, had contested the extradition proceedings.
Counsel for the State Leo Mulrooney told the court that Mr Malik was due for extradition since the order was made on 20 December.
However, in the New Year the Czech president Vaclav Klaus announced an amnesty for a third of prisoners and thousands awaiting trial.
Mr Mulrooney said that Mr Malik was one of those to whom the amnesty applied.