Today I have been freed. I am very happy that shortly I will be able to go home and meet my family," Mr Mehrtens, speaking in Indonesian, told reporters in Timika.
"Thank you for everybody who helped me today, so I can get out safely in a healthy condition."
His release follows months of "critical" diplomatic efforts by authorities in Wellington and Jakarta.
New Zealand Prime Minister Christopher Luxon welcomed the release and New Zealand foreign minister Winston Peters added: "His family will be absolutely over the moon".
Indonesian police spokesperson Bayu Suseno said Mr Mehrtens was released and then picked up in a village called Yuguru in the Maibarok district before being flown to the city of Timika.
Several days before the release, rebels told the BBC Indonesian service they would free Mr Mehrtens "safely and in accordance with international standards for the protection of human rights".
"We the West Papua National Liberation Army (TPNPB), remain committed to upholding the values of peace, respect and dignity in this situation," spokesman Sebby Sambom said.
The pilot, a father-of-one, is being flown to Jakarta to be reunited with his family.
He was kidnapped after his small passenger plane - which belongs to Indonesia's Susi Air - landed in Nduga in February last year.
He was meant to return a few hours later after dropping off five passengers but shortly after landing, rebels targeted the single-engine plane and seized him.
The five other passengers, who were indigenous Papuans, were released.
