Donwahi, who flew into the west African country's second city Bouake earlier yesterday in a bid to defuse an escalating crisis, was whisked out on a plane from the local airport shortly after his release, an AFP photographer said.
President Alassane Ouattara had announced a deal to end the dispute yesterday evening following talks between Donwahi and the soldiers, who took control of Bouake early Friday.
But angry troops rejected the terms of the agreement, firing Kalashnikov rifles and heavy weapons outside local government offices where they were meeting to block Donwahi and his team from leaving.
The soldiers are seeking bonuses, pay rises, housing and faster promotion.
Bouake was the headquarters of an armed rebellion that broke out in 2002 and split Ivory Coast in two until 2011, sparking a decade of clashes and crises.
The current mutiny appears to have been spearheaded by former rebel fighters who have now been integrated into the army.
Neither Donwahi nor the mutineers made any comment as the minister was released. Donwahi and his aides headed straight to the airport and their plane took off immediately, an AFP photographer said.
Ouattara had given no details of the deal offered to the mutineers, saying in a brief televised announcement earlier that it took into account "the demands relating to bonuses and improving the living conditions of soldiers".
In Abidjan, national television reported earlier that shots had been fired at the northern Akouedo barracks, as soldiers put up barricades in the bustling commercial hub that is home to the presidency, government and parliament.
Troops closed off a major junction nearby, leaving the surrounding roads gridlocked, although images broadcast on national television showed traffic returning to normal.
Schools and businesses remained shut yesterday in Bouake, where the unrest erupted early Friday when troops broke into a weapons depot, arming themselves with rocket-launchers and other weapons mounted on pickup trucks before attacking police posts, manning strategic junctions and putting up barricades.
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