His lawyer Jared Genser said that Namazi, an 81-year-old former UNICEF official, cannot leave Iran and is prohibited from speaking to the media. His son, business consultant Siamak Namazi, is still in jail.
Both are dual Iranian-American citizens.
Namazi was rushed to a hospital on January 15 -- the fourth time in the last year -- after a "severe" drop in his blood pressure, an irregular heartbeat, "serious" energy depletion and white colouring, Genser said.
"We welcome the release of Baquer Namazi given his deteriorating health, but we note that his release is only temporary," State Department spokeswoman Heather Nauert said in a statement.
"We call for the immediate and full release of the Namazi family, including his son Siamak, as well as other Americans unjustly held by the Iranian government."
The Namazis were given 10 years in prison for "espionage and collaboration with the American government" in October.
The elder Namazi's son Babak said "a return to prison would be life-threatening for him."
Genser said returning to prison on Thursday as ordered would amount to a "death sentence" for Namazi.
"On humanitarian grounds, his leave must be made permanent. And it is urgent that Siamak Namazi and the rest of the wrongfully imprisoned Americans also have their cases resolved," Genser said.
Xiyue Wang, a Chinese-American researcher from Princeton University, was also given a 10-year sentence for espionage.
Ex-FBI agent and CIA contractor Robert Levinson went missing in March 2007.
The two countries along with other major powers signed an accord July 14, 2015 aimed at curbing Iran's nuclear program. Washington has continued to honour the accord, despite Trump's threats as a candidate last year to "rip it up.
Disclaimer: No Business Standard Journalist was involved in creation of this content
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