The US State Department has confirmed a US official will leave Delhi at India's request in connection with the Khobragade case.
It said it deeply regrets the move and hopes the dispute over the Indian diplomat will now come to closure and it hopes India will return to constructive ties with US.
The Indian diplomat at the centre of the row with the US flew home today despite being charged over the treatment of her housekeeper, the Indian foreign ministry said.
After weeks of escalating tension between the usually friendly countries, the US and India reached an agreement under which Devyani Khobragade leaves the country, but still faces charges if she returns.
Indian foreign ministry spokesman Syed Akbaruddin confirmed the development in a tweet.
In a separate statement, the foreign ministry said India had rejected a request from the US to waive Ms Khobragade's diplomatic immunity, prompting her to depart the country and leave her children behind.
"The US Government requested the Government of India to waive the immunity of Counsellor Khobragade," said the ministry.
The government "declined to do so and transferred Counsellor Khobragade to the Ministry of External Affairs in New Delhi".
The indictment against Ms Khobograde accused her of lying on the housekeeper's visa application and paying her less than half the statutory minimum wage.
Ms Khobograde's arrest last month came when she was dropping her children off at school in New York, where she was serving as deputy consul general.
Doubts over whether that post accorded her diplomatic status led India to work feverishly behind the scenes to ensure that she avoided being dragged before the courts.
Foreign Minister Salman Khurshid had vowed to "bring her home" at any price.
Ms Khobragade's arrest on 12 December caused outrage in India, especially when it was revealed she was strip-searched and cavity-searched.