"Anwar should never have been jailed in the first place, and his long overdue release is an important step towards the restoration of justice and human rights in Malaysia after so many years of political persecution by previous governments", said Salil Shetty, Amnesty International's Secretary General.
Earlier, Anwar was thronged by scores of supporters and reporters after he walked free from a hospital, where he was recovering from shoulder surgery, and whisked away to an audience with Malaysia's king.
The second 'sodomy ' case against Anwar Ibrahim began in 2008.
"This pardon has completely cleared him name at last, but it is a unique pardon, there has never been one like this in Malaysia".
But the 92-year-old Mahathir, now himself arrayed against the BN coalition he once headed, led Anwar's pro-reform alliance to a stunning election victory last week and orchestrated the release of his old foe in an extraordinary rapprochement.
A popular Islamic student leader, Anwar joined the ruling Malay party in 1982, a year after Mahathir became prime minister.
Anwar said, stressing that the Agong acted the moment he received all the details of the election results.
Despite that, Anwar remained as PKR's de facto leader and had played a role from behind bars.
EPL: Manchester City Broke 7 Records To Win
Here, AFP Sports looks at what lies ahead for the Premier League's top six. One hundred points is magnificent", BBC Sport quotes Guardiola as saying.
Anwar Ibrahim speaks to the media after his final appeal against a conviction for sodomy concluded at the Palace of Justice in Putrajaya, Malaysia on November 7, 2014.
Mr Anwar spent nine of the past 20 years in prison on charges he insists were politically motivated, having been jailed on two occasions - the previous time in 1998 by Mr Mahathir.
"In the initial stages, maybe lasting one or two years, I will have to be the prime minister and I will have to run the country", he said Tuesday via video conference to participants at a Wall Street Journal event in Tokyo. In a statement on Sunday, Anwar reiterated his party's support for Mahathir's leadership but called for decisions to be made jointly. He was later arrested and jailed on charges of sodomy and corruption.
"My position is to give him all the support necessary to allow him to ensure that the agenda for reform, the changes that need to be done, can be carried out", he said.
Supporters gathered on Thursday at the hospital from where Anwar walked free just a week after his alliance scored a shock victory in a general election.
Mahathir told the conference that there will be "no deal" with Najib over the graft scandal. He reiterated his full support for Mahathir's leadership and said their political feud has always been buried.
Mr Mahathir said he was "happy" to see his former nemesis freed, as he pushed ahead with the new government's reform plans: scrapping the unpopular goods and services tax from June 1st and releasing a previously classified audit of the problems at 1MDB, the graft-tainted state fund.