Daniel Dudzisz, 26, went missing in February south-west of Longreach in remote Queensland as he reportedly tried to walk solo more than halfway across Australia.
Police said a motorist picked up the bedraggled tourist on Thursday near Cooper Creek outside the town of Windorah.
Dudzisz – who is diabetic and insulin-dependent – told police he waded through floodwaters and ate flies to survive his ordeal in the vast and wild Outback.
"If you hadn't heard it with your own ears – and my officers have – you certainly wouldn't believe it," Inspector Mark Henderson told the Australian Broadcasting Corporation.
"He joked about never going hungry in the Australian Outback because of the amount of flies you can eat for their protein apparently."
Dudzisz told police he was determined to continue his journey to Australia's Northern Territory and was last seen heading beyond the remote town of Mt Isa to cross the state border.
The German has been walking through New South Wales and Queensland states for several months and Henderson said local farmers had kept police informed of his whereabouts, often calling after meeting him on their properties.
"It's a very remote and isolated area with lots of hazards," Henderson told AFP, with one of them the deadly inland taipan snake which was currently "out in force" due to flooding.
"It's not great territory" for walking at night, as Dudzisz does, added Henderson, saying there were also fierce wild boars in the area.
Henderson said police became worried when Dudzisz set off from Windorah on February 17th heading to Jundah, about 90 kilometres away, in the path of floodwaters, and was not seen again.
After a motorbike search they launched an aerial sweep on February 24th, but more localized flooding saw operations suspended.
'We thought he had perished'
The inspector said the German walker later recounted he had lost his way and became stranded between two flooded areas of the Barcoo River, spending about 10 days on an "island" which formed in the massive stretch of water.
"He had very limited food. He told us he's eaten flies and he's probably right," Henderson said, adding that the supplies of baked beans and cereal he had when he left Windorah had been quickly exhausted.
"We certainly thought he had perished; we certainly had grave concerns for him. Medical experts had told us he wouldn't have survived that long without food."
Dudzisz spurned medical treatment when he returned to Windorah.
"He certainly was hungry, but other than that he was in reasonable spirits," Henderson said.
The Brisbane Times reported that he planned to walk 4,000 kilometres from New South Wales to Uluru – Ayer's Rock – in the heart of Australia.
But Henderson said he had been convinced to now travel on the roads, rather than along the rivers and other shortcuts.
In a February 6th interview with the southwest Queensland weekly Warrego Watchman, Dudzisz admitted his marathon hike was "quite hardcore".
But he said he could handle it after being homeless for two years.
"What I enjoy about the walking most is just how much closer nature feels… And all the little unexpected encounters and adventures that tend to accumulate along such a journey."
He related a story of a night-time fight with an aggressive kangaroo and also being shot at by a farmer who mistook him for a kangaroo.
Dudzisz also met with opal miner Andrew Plax while passing through the Queensland mining town of Yowah.
Plax told Fairfax Media the German was the most intriguing traveller he had met in years and that he had no doubt he would be found alive when he was missing.
"I'm not worried about him yet," Plax said at the time. "He lives on the smell of an oily rag food-wise.
"Water's not a problem at the moment, and he drinks from cow troughs and puddles."