Fonseka, who led the army to victory against Liberation Tigers of Tamil Eelam in the war, which crushed the Tamil separatist outfit, fell out with his commander-in-chief Rajapaksa after war victory.
The former army chief was arrested and convicted by both military and civil courts and stripped off military ranks in August 2010.
Served with a 30-month jail term beginning September 2010 Foseka was convicted again last November for breaching national security and handed a three-year sentence.
Rajapaksa ignored mass protests for his release including international pressure.
A United States green card holder, Fonseka was named a political prisoner in the US State Department's 2010 human rights report.