Australia's most decorated swimmer, Thorpe retired after the Athens Olympics before making an unsuccessful comeback bid for London in 2012.
He contracted the infection after undergoing shoulder surgery earlier this year and initial reports had him in intensive care battling to save the use of his left arm.
His manager James Erskine poured cold water on those reports and on Wednesday said the 31-year-old had been released.
"It looks as though the infections have cleared up. It can always re-infect as it's done twice before but we are hopeful," he told Australian Associated Press (AAP).
Thorpe was also admitted to hospital earlier this year to treat depression after he was found disoriented in Sydney.
Police were called when a resident saw Thorpe behaving oddly near a vehicle and Erskine later said he had been taking a mixture of anti-depressants and medication for his shoulder.
Erskine said on Wednesday that Thorpe was unlikely to return to a rehab clinic after his release from hospital.