The two negotiators left the four-storey grey building in the town of Slavyansk with the freed Swedish officer, an AFP journalist on the scene saw..
The three made no comment to waiting reporters before driving away in a white car marked with an OSCE logo.
Negotiations continued for the release of the other seven European inspectors -- from Germany, Poland, the Czech Republic and Denmark -- and four Ukrainian army officers who were seized with them on Friday, a rebel spokeswoman told AFP.
Hours earlier, the rebels had put the eight inspectors from the Organisation for Security and Cooperation in Europe in front of the cameras of a media conference they called in the town hall.
Speaking through one of their number, a German officer, the Europeans asserted their diplomatic status to the scores of local and foreign journalists.
With four armed rebels watching over them as they spoke, the group said they were in good health.
They said they had been captured by the insurgents on Friday around four kilometres (two miles) outside Slavyansk, as they had been about to return to the regional hub city of Donetsk.
"I cannot go home of my own free will."
Schneider added that he did not know the whereabouts of the four Ukrainian officers also detained.
Earlier, the local rebel leader in the town, Vyacheslav Ponomaryov, told AFP and a small group of other reporters the OSCE observers were considered "prisoners of war".
"In our town, where a war situation is going on, any military personnel who don't have our permission are considered prisoners of war."
Ponomaryov, who was wearing a pistol in a holster and was escorted by two armed bodyguards, claimed in the same interview that the observers "are not our hostages -- they are our guests".
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