No details were released of how Gianluca Salviato, 48, came to be liberated days after another Italian, Marco Vallisa, 54, was freed after four months in the hands of abductors.
Libyan security sources said that Vallisa had been freed following the payment of a ransom of around €1 million ($1.25 million) to the armed militia that had been holding him.
Salviato was abducted on March 22nd in Tobruk, a town close to the Egyptian border where he was working for Italian construction company Enrico Ravanelli on a sewage project.
There had been intense fears for his well-being because he is diabetic and the drugs he needs to take regularly were found in the car he was taken from.
But his mother Gelsomina Salviato said Sunday she had been told her son was okay.
"When I heard that I cried so much and then, at last, I was able to sleep peacefully," she told Italian news agency Ansa. "The nightmare is over."
Kidnappings of foreign workers are rife in Libya, three years after dictator Moamer Kadhafi was toppled and killed in a Nato-backed revolt.
The ousting of Kadhafi left a weapons-filled vaccum that has been filled by competing militias who have set up mini fiefdoms in different parts of the country.
Italy's willingness to pay ransoms to get its nationals home safely is controversial with some of its Nato allies, chiefly Britain and the United States, which argue that handing over cash only encourages further abductions and can end up funding terror attacks.
In theory, Italy signed up to not paying ransoms at a Nato summit in September but officials have privately portrayed the kidnappings in Libya as essentially criminally motivated rather than being the work of hardened terrorists.
Salviato's liberation leaves four Italians unnaccounted for in conflict zones.
Aid workers Vanessa Marzullo and Greta Ramelli went missing in July in Syria, where Jesuit priest Paolo Dall'Oglio was kidnapped in July 2013.
Another aid worker, Giovanni Lo Porto, disappeared in the tribal zones between Pakistan and Afghanistan in January 2012.