Pakistani officials handed over Varthaman to Indian officials, including from the IAF, at the Attari-Wagah Border.
However, the pilot was whisked away in a convoy by Indian officials away from the public glare.
According to IAF officials, he will be brought to Delhi from Amritsar in a special flight.
Varthaman was captured by Pakistani authorities on February 27 after an air combat between the air forces of the two countries, a day after New Delhi had conducted counter-terror operations in Pakistan's Balakot.
Pakistan Prime Minister Imran Khan addressing a special joint sitting of Parliament on Thursday announced his release as a "peace gesture". However, India has been maintaining that Pakistani decision is in consonance with the Geneva Convention.
The Pakistan government was under tremendous international pressure to de-escalate the tensions with India and release the captured pilot.
Forty CRPF personnel were killed and many injured on February 14 in one of the deadliest terror attacks in Jammu and Kashmir when a Jaish-e-Mohammed suicide bomber rammed a vehicle carrying over 100 kg of explosives into their bus in Pulwama district.