Ogun state police spokesman Abimbola Oyeyemi said the hostage was "rescued" on Thursday, but the security services have previously claimed successful rescue operations even when ransoms were paid.
The company the kidnapped man works for, construction firm Julius Berger, provided no details on the release but said that the employee was kidnapped on October 24th in an attack which left another German national dead.
"Julius Berger Nigeria Plc is pleased to officially announce the release of the company's member of staff, who was abducted in Ogun State," a statement from the firm said.
"The company would like to thank the all those who assisted in achieving a swift and safe release, especially government authorities and security services."
Four gunmen emerged from the bush and opened fire on two vehicles in which the two men were travelling.
The employee who died, a sub-contractor, died in hospital from a bullet wound while two other staff members were hurt.
Julius Berger confirmed that the group was moving in separate vehicles without security escort to a quarry in Ogun state.
Foreign companies, especially oil majors and large construction firms,typically require expatriate staff to travel with police escort because of the
high threat of kidnapping in Nigeria.
Abductions targeting foreigners are common throughout the southern part of the country.
Hostages are often released following a payment, especially in the oil-producing Niger Delta region, which has seen waves of similar attacks.
The security services and the companies involved rarely discuss details of ransom payments and there was no mention in Thursday's statement that money had exchanged hands.
The shooting was "an isolated criminal incident" which did not affect its operations elsewhere in the country, the firm said last week.
Julius Berger has operated in Nigeria since 1965 and has more 600 employees in the country, according to the company's website. Many of its staff are Nigerian nationals.
Foreigners have also been abducted in the north of Africa's most populous country in attacks seen as linked to Boko Haram's Islamist uprising.
A German national was kidnapped in July in northeastern Adamawa state, one of the areas under a state of emergency because of Boko Haram attacks. His whereabouts and condition remain unknown.
One of their most notorious abductions involved a German national in the northern city of Kano in January 2012.
Edgar Fritz Raupach, an engineer, was kidnapped on the outskirts of the city days after one of the deadliest ever raids by Boko Haram, a coordinated gun attack in Kano that killed more than 185 people.
Raupach died there in May of that year, apparently during a sweep by the security services on a Boko Haram safe house.
Security sources at the time said they had no idea that Raupach was being held in the house when they stormed it.
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