Jailed Malaysian reformist Anwar Ibrahim was granted a full pardon Wednesday and walked free from a hospital in Kuala Lumpur, capping dramatic changes in the Southeast Asian country since the government was ousted in an election upset last week.

Anwar, 70, smiled and waved to supporters as he walked out of hospital, dressed in a black suit and tie and his hair neatly swept back. He was surrounded by his family, lawyers and prison guards before driving to the palace for an audience with King Sultan Muhammad V.

"Now there is a new dawn for Malaysia. I must thank the people of Malaysia," Anwar said. "The entire spectrum of Malaysians, regardless of race or religion, have stood by the principles of democracy and freedom. They demand change."

Supporters chanted "Reformasi" (Reform), the movement he launched two decades ago to challenge diverse Malaysia's race- and patronage-based politics.

Anwar has served three years of a five-year term for sodomy, a charge he says was trumped up by the government of ousted Prime Minister Najb Razak.

Following his release, Anwar said he would give full support to the government led by his ally-turned-foe-turned-ally Mahathir Mohamad, but would not immediately be part of it.

"I have given my assurance, I am here as a concerned citizen to give complete support to manage the country on the understanding that we are committed to the reform agenda, beginning with the judiciary, media and the entire apparatus," Anwar said in a news conference at his home after he was freed from custody.

He said it was Mahathir's prerogative to form the cabinet, but noted he had given assurances that he will consult party leaders.

Anwar said he would take some time off with his family. "I've told Tun Mahathir, I don't need to serve in the cabinet for now," he said, using an honorofic for the prime minister.

Mahathir, with whom Anwar joined forces to win last Wednesday's election, was at the palace to greet him.

"The king, with the advice of the pardons board of the federal territories of Kuala Lumpur, Labuan and Putrajaya, has allowed a full pardon and given an immediate release for ... Anwar bin Ibrahim," the palace said in a statement.

Anwar had been recovering from a shoulder injury in hospital under police guard. He was Mahathir's deputy in the 1990s but fell out with his mentor during the Asian financial crisis.

He was sacked from the ruling party and founded the Reformasi movement, challenging Mahathir's government. He was later arrested and jailed on charges of sodomy and corruption.

Images at the time of a goateed, bespectacled Anwar in court with a black eye and bruises brought condemnation of Mahathir from around the world.

Anwar's trial became a spectacle, with prosecutors at one stage bringing out what they said was a semen-stained mattress allegedly used when he had sex with two male aides.

After being freed, Anwar was jailed a second time for sodomy in 2015. Both times, he and his supporters have said the charges were politically motivated.

"Many have asked me how it is that our reform movement has now joined forces with the very same former dictator, Mahathir Mohamad, who sacked my father in 1998 and saw him arrested, brutalized and incarcerated," Anwar's daughter Nurul Izzah, wrote in an article for the Guardian newspaper on Tuesday.

"My answer is simply that we must all firmly resolve to never let our nation sink to the depths it did again and prime minister Mohamad now has a rare second chance to put things right."

The pardon, granted on the grounds that there was a miscarriage of justice, allows Anwar to re-enter politics immediately.