Al-Araibi's lawyer confirmed on Monday that his client is to be freed by Thai authorities, having been detained since last November on an Interpol notice issued at the request of Bahrain.
The 25-year-old fled his homeland in 2014 before being granted permanent residence in Australia, where he is on the books of semi-professional club Pascoe Vale.
The pro-democracy advocate had been sentenced to 10 years' imprisonment in absentia by the Bahrain regime for alleged vandalism but denied any involvement.
A campaign championed by former Australia captain Craig Foster has been calling for FIFA and human rights groups to put pressure on the Thai government to release him.
FIFA released a statement on Monday praising the successful outcome, adding it hopes to see the player resume his career once he is back in Australia.
"FIFA is extremely pleased to see Hakeem Al-Araibi released from prison in Thailand and allowed to travel back to his home in Australia," world football's governing body said.
"This is the outcome we have worked for together with a broad coalition of human rights organisations, governments and the wider football community over the past two months.
"We would like to sincerely thank everyone who has contributed to this outcome and, in particular, the relevant public authorities for doing the right thing and bringing Hakeem's ordeal to an end. We wish Hakeem a safe return to his family and hope he will be able to resume his footballing career soon."