On January 15, unknown gunmen seized the three US men from a private residence in the southeastern Dora district of Baghdad.
The three men were said to have been employed by a small company that is doing work for General Dynamics Corp, under a larger contract with the US Army, according to a source familiar with the matter.
An Iraqi security official had earlier told CNN that the men were identified as two Iraqi-Americans and one Egyptian-American.
A security operation was underway in the al-Saha part of the Dora neighborhood, an Iraqi intelligence official with Baghdad operations command told CNN.
The contractors were taken away in a vehicle convoy, said the source, who talked to CNN on condition of anonymity, as he is not authorized to speak to the media.
They were the first Americans to be abducted in Iraq since the withdrawal of US troops in 2011.
The US State Department on Tuesday welcomed the release of the three Americans "who were reported missing in Iraq in January", crediting the Iraqi government with helping secure their return.
"We sincerely appreciate the assistance provided by the government of Iraq, and its whole-of-government effort to bring about the safe release of these individuals," State Department spokesman Mark Toner said in a statement, Reuters reported.