Oliver Jufer is expected to be deported soon
Oliver Jufer was sentenced last month, after he admitted spray-painting images of the revered King Bhumibol Adulyadej in the city of Chiang Mai.
Mr Jufer has been ordered to leave the country and was due to be deported by the end of the day, according to the news agency AFP.
Mr Jufer is thought to be the first foreigner jailed under such laws.
"The king in his kindness has granted him a pardon and he has been transferred from prison and is in the process of being deported from the country," Chiang Mai police Col Prachuab Wongsuk told the Associated Press news agency.
Defacing portraits
The king is widely loved in Thailand and often treated as a virtual god.
Analysts say that this act of compassion against a now contrite foreigner will only enhance his image still further.
Jufer had lived in Thailand for more than 10 years before his arrest.
He was recorded on surveillance cameras on 5 December, defacing the portraits on the king's 79th birthday.
Earlier he had tried to buy alcohol but been refused, since such sales are sometimes banned on important days.
The case against Jufer highlights the strict laws in Thailand that forbid any criticism of the monarchy.
These laws have remained virtually unchanged since the creation of the country's first criminal code in 1908.
Most Thais feel a deep reverence for their monarch. But they also fear discussing the institution because of the severe penalties for criticising members of the royal family.
The government is also anxious to protect the monarch's image. Despite heavy criticism, it recently took the decision to block access to the videosharing website YouTube because it contained clips which were deemed offensive to the king.
Der thailändische König Bhumibol Adulyadej hat den am 29. März dieses Jahres wegen Majestätsbeleidigung verurteilten Schweizer Oliver Rudolf Jufer begnadigt. Jufer war zu 10 Jahren Haft verurteilt worden, weil er am 79. Geburtstag des Königs in Chiang Mai Poster, die Bhumibols Konterfei zeigten, mit schwarzer Farbe besprüht hatte. Nach Polizeiangaben soll Oliver Jufer, der seit mehr als zehn Jahren in Thailand lebt, nun so bald wie möglich in sein Heimatland abgeschoben werden.