Olson was released from the women's prison in Chowchilla, Calif. just after midnight, and taken to a local parole office for processing, then released to her husband. Fred Peterson has been living in Minnesota while his wife served her seven-year sentence in California.
They are expected to eventually return to their home in St. Paul, where the 62-year-old Olson is likely to get a mixed reception.
"I'm happy that she's coming back," said one of her neighbors in the Highland Park neighborhood of St. Paul, who asked only to be identified as Barbara.
Barbara counts Olson as a friend and says she was as surprised as anyone about her notorious past. She says that wasn't the woman they knew for years.
"I think she set an example as a wonderful mother, and a giver," said Barbara. "I think she had passion for very important causes, for reading to the blind and the Center for Victims of Torture, things like that. She's a wonderful neighbor and that's how we know her."
Others are not as welcoming.
Minnesota Gov. Tim Pawlenty asked California Gov. Arnold Schwarzenegger to block Olson's parole to Minnesota under existing interstate corrections agreements. Republicans in the state Legislature also unsuccessfully sought a resolution opposing her return.
The St. Paul police union also tried to stop her Minnesota parole.
Dave Titus is head of the police federation, and says his members support their colleagues in Los Angeles who ask that Olson serve her entire sentence, including parole, in California, rather than among friends and family in St. Paul.
"The fact of the matter is that she ran from justice and she snubbed her nose at justice, so I don't think anybody can claim to know her character," said Titus. "She has been a fraud and a coward for over two decades."
One of Olson's attorneys, David Nickerson, said he was glad his client was out of custody and being paroled to Minnesota, rather than being forced to serve her parole in California.
"I think that's obviously the best place for her. That's where her family is," he said.
Schwarzenegger said he deferred the decision to the California corrections department, which said parole decisions are intended to give former prisoners the best chance of reintegrating into society and avoiding rearrest.
“She snubbed her nose at justice ... She has been a fraud and a coward for over two decades.”Dave Titus, St. Paul Police Federation
"Being with their family increases the chances that they will succeed on parole," a department spokeswoman said.
Olson's crimes date back to the mid-1970s, during a high-profile crime spree committed by the leftist Symbionese Liberation Army.
Originally known as Kathleen Soliah, Olson joined the SLA as a young woman. The group was most notorious for the abduction of newspaper heiress Patty Hearst in 1974.
Olson admitted taking part in several crimes on behalf of the group. In the first, a pair of pipe bombs were slipped under Los Angeles Police Department vehicles. One malfunctioned and another was discovered before it went off.
A few months later, the group robbed a suburban Sacramento bank and a customer, 42-year-old Myrna Opsahl, was shot and killed by one of the robbers as she waited to deposit donations from her church.
As Soliah, she was originally indicted for the bombings in 1976, but fled California and lived in Africa and Minnesota for decades under her assumed name.
Olson was arrested in St. Paul in 1999, after the television show America's Most Wanted profiled her, and she legally changed her name to her fugitive alias while she was in jail.
Olson pleaded guilty to her crimes in 2002 and was mistakenly released last year, only to be sent back behind bars.
She is expected to be under Minnesota Department of Corrections supervision for another year, and she is expected to return to the state within the next week.
All but one other former SLA member have been released from prison after pleading guilty in 2002 to taking part in the 1975 bank robbery.
Emily Montague-Harris was paroled in February 2007 after serving half her eight-year sentence. She says she accidentally fired the shotgun that killed bank customer Myrna Opsahl.
Montague-Harris' former husband, William Harris, was paroled in September 2006 after serving half his seven-year sentence for acting as a lookout during the robbery. The couple previously spent eight years in prison for the Hearst kidnapping.
Hearst herself spent nearly two years in prison before her sentence was commuted by President Jimmy Carter. She was pardoned by President Clinton in 2001.
Michael Bortin was paroled in February 2006.
Only James Kilgore remains in prison. He eluded capture in South Africa until his arrest in November 2002 and was sentenced in May 2004. He is scheduled for release in May.
Olson's brother, Steven Soliah, was acquitted of charges that he was involved in the fatal bank robbery. He declined to be interviewed when a reporter showed up at his Berkeley home Monday night.
"We were young and foolish. We felt we were committing an idealized, ideological action to obtain government-insured money and that we were not stealing from ordinary people," Olson wrote in an apology before her sentencing for the bank robbery. "In the end, we stole someone's life."
The terms of Olson's year-long parole specify that she cannot associate with former SLA members or co-defendants, including her brother.
(The Associated Press contributed to this report)