A former professional footballer in Italy, al-Saadi had been held in a Tripoli prison for more than seven years over crimes committed against protesters and for the 2005 killing of Libyan football coach Bashir al-Rayani.
Known as a playboy during his father's 42 years in power, al-Saadi was acquitted on appeal over the murder of Rayani in 2018, and press reports on Sunday said he had already flown to Turkey.
One of eight children
Al-Saadi Gadhafi was one of eight children of former Libyan ruler Moammar Gadhafi.
In 2011, an uprising in the country saw Gadhafi arrested and killed along with three of his sons. Members of his family fled the country to other parts of the Arab world including Algeria and Lebanon.
Al-Saadi Gadhafi sought refuge in Niger until March 2014 when the country extradited him to stand trial for the 2005 killing of soccer coach Bashir al-Rayani.
The court of appeal cleared him of wrongdoing in April 2018 although he has been kept in a Tripoli prison since then accused of crimes against protesters.
After the death of Moammar Gadhafi the country fell into disarray.
And in a tweet on Sunday regarding al-Saadi's release, Prime Minister-designate Abdul Hamid Dbeibah said: "We cannot move forward without achieving reconciliation or establishing a state without achieving justice, enforcing the law, respecting the principle of separation of powers and following judicial procedures and rulings."
He added: "On this basis, the citizen "Al-Saadi Gaddafi" was released today, in implementation of the release issued against him by the Public Prosecution."