Tebbutt, 57, was taken on September 11 from a remote Kenyan beach resort near the Somali border by assailants who shot dead her husband David in a late-night raid.
“We can confirm she is in a safe place here in Kenya,” said British embassy spokesman John Bradshaw.
Tebbutt told British television she was “happy” to be freed, praising her son who she said had made it possible.
Video footage on the BBC showed a thin-looking but apparently cheerful Tebbutt, dressed in the flowing robes and coloured headscarf commonly worn by Somali women, being led towards a small airplane.
She was released in the Addado region, about 50 kilometres (30 miles) from the Ethiopian border and about 500 kilometres northeast of Somalia’s capital Mogadishu.
A local resident said a ransom of $1.2 million (Sh99 MILLION) was paid to secure her freedom, but the figure could not be independently verified.
In a separate interview filmed before she was freed, Tebbutt said she had been well treated by her captors.
Pirates in the region also hold hundreds of hostages seized from ships in the Indian Ocean, and have in the past demanded multi-million dollar ransoms for the release of captives and of boats.
A spokesman for British Prime Minister David Cameron said it was not government policy to pay ransoms. “Our position is that we do not pay ransoms and we do not facilitate concessions to hostage-takers,” he said.
Asked whether officials had advised the family not to pay a ransom, he replied: “All I can say is that we have been in close contact throughout.”