Coley was arrested in connection with deaths of Rhonda Wicht and her four-year-old son Donald in 1978 in Simi Valley, 70 km west of Los Angeles. Two years later, he was convinced of the crimes that he did not commit and sentenced to life without the possibility of parole, reports Xinhua news agency.
Coley requested a new investigation through the Board of Parole in 2015.
Eventually, a former police detective, captain and officer believed that the original detective mishandled the investigation or framed Coley.
In his pardon issued on Wednesday, Brown said Coley had no criminal history before being convicted of the murders and had been a "model inmate for nearly four decades" by avoiding gangs and violence.
"The grace with which Coley has endured this lengthy and unjust incarceration is extraordinary."
The Governor ordered the California Department of Corrections to immediately release Coley from prison and that those who actually committed the crimes be brought to justice.
Before the pardon, the Simi Valley Police Department and Ventura County District Attorney's Office announced on Monday that based on DNA testing, Coley was indeed wrongfully convicted and is innocent.
"It is an absolutely shocking and tragic reminder that the best justice system man ever created is not perfect," Ventura County District Attorney Gregory Totten said at a press conference.