Corby, 36, escorted from prison through a crowd of reporters, must remain on the island under the conditions of her parole, and will not be allowed to return to Australia before 2017.
"She will be required to report every month," said a Bali justice spokesman. "To control the fulfilment of her parole, the authorities will occasionally visit her home here."
The former beauty student will live with her sister in Bali, according to media reports.
Corby was sentenced to 20 years in prison in 2005 for trying to smuggle 4 kg (8.8 lb) of marijuana into Bali.
Drug trafficking usually carries the death penalty in the world's fourth-largest country.
President Susilo Bambang Yudhoyono granted Corby's clemency plea in 2012, reducing her sentence by five years because of good behaviour.
She has maintained her innocence, saying she was unaware she was carrying the drugs.
Corby was one of nearly 1300 convicts approved for parole last week, the Justice Ministry said in a statement, because she "fulfilled substantive and administrative requirements as laid out by the law".