Police said that Duley was released unharmed at around 1: 15 am at a remote place between Goaltore and Pingboni to a select team of electronic media.
He was then taken to the Lalgarh police station, police added.
Sources said that Duley's release came after an exchange of fire between the security forces and the naxals after the former was tipped-off about the teacher being taken to Bhalukbasa jungle in West Midnapore district.
The security forces on receiving the information cordoned off the area and was retaliated with gun fire from the rebels in which one of the cadre was killed.
Following the incident Sidhu Soren, a leader of Sidhu Kano Gana Committee, the militant wing of People's Committee against Police Atrocities told Duley's son to address the press and inform about their demand for the release of their leaders, along with 37 villagers who were arrested for hindering the joint forces during encounter at Bhalukbasa jungle.
However, the Director General of Police Bhupinder Singh rejected the demand, stating that their release was out of question.
"The Maoists are under pressure and have been scaling down their demands," he said on Monday, Mar 8 evening.
Duley, headmaster of Sarulia Secondary School was kidnapped at gun point on Mar 5 by Gana Militia of the People's Committee Against Police Atrocities.
Maoists had demanded the release of arrested Maoist leader Telugu Deepak along with other detained leaders.