Katsav, 71, who served as Israel's eighth President from 2000 to 2007, was convicted in December, 2010 of raping and sexually assaulting a former employee at the Tourism Ministry.
He was also found guilty of sexually harassing two other women at the President's official residence while serving in office and assaulting one of them.
Katsav's imprisonment in May 2011 also included a conviction for obstruction of justice.
"There's no doubt among the committee members that the prisoner has undergone a change," the parole board wrote in the decision.
"This is in light of the remarks he expressed to the committee members in the current hearing, unlike the things he said in the past two hearings", the statement further said.
Under the terms of his release, Katsav isforbidden to work in positions where he has authority over women and cannot give interviews.
Left-wing Meretz party lawmakers, Zehava Galon, Michal Rozin and Tamar Zandberg, called the parole board's decision "cowardly and tainted", saying Katsav "used his political power in order to rape and now he is exploiting this same political power in order to receive early release".
Katsav held a series of Cabinet posts before being elected President in 2000. The charges against him forced him to resign in 2007, two weeks before his term was to end.
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