The court made the decree on the grounds of his age and health, according to the court’s spokesperson Bimal Paudel.
Sobhraj, aged 78, had been serving a life sentence in a jail in the Kathmandu suburb of Bhaktapur for killing two tourists in 1975, but many of his alleged murders remain unsolved.
A two-judge bench of the Supreme Court ordered the government to release him immediately and deport to “his country” within 15 days, the spokesperson added.
Sobhraj is suffering from a heart disease and needs open-heart surgery, the court said.
Born in French-administered Saigon, Vietnam, Sobhraj was first jailed in Paris in 1963 for burglary but went on to be accused of committing crimes in a list of countries: France, Greece, Turkey, Iran, Afghanistan, Pakistan, Nepal, India, Thailand and Malaysia.
He also escaped from prison in several countries, and his propensity for evading the authorities earned him the nickname “The Serpent.”
Sobhraj eventually admitted to at least 12 killings between 1972 and 1976, and hinted at others to interviewers before retracting the confessions ahead of further court cases, according to his biographers. His true number of victims is unknown.
In 2014, a Nepali court convicted Sobhraj for the 1975 murder of Canadian tourist Laurent Carrière, handing down a 20-year sentence.
The 2021 BBC/Netflix drama called “The Serpent” is based on the story of Sobhraj’s alleged murders. It tells how for years, he evaded the law across Asia as he allegedly drugged, robbed and murdered backpackers along the so-called “hippie trail” – while former Dutch diplomat Herman Knippenberg worked with authorities to capture him.