A court in Lahore acquitted Raymond Davis, who killed two Pakistanis in Lahore in January, after families of the slain men accepted blood money.
The acquittal came few hours after the court formally charged the American man for killing two Pakistanis.
Reports said that Raymond Davis was airlifted out of Pakistan in a special American air force plane shortly after the court acquitted him.
Opposition political groups staged rallies in main cities and condemned the release of the CIA agent.
Police used batons to disperse dozens of angry people in Lahore, injuring several demonstrators, including women. The police arrested several protestors. Demonstrators also pelted stones at the police.
Demonstrations were also held in Karachi, Islamabad, Rawalpindi and several other cities and the demonstrators condemned the release of CIA contractor. The demonstrators claimed that the government had forced family members of the slain men to sign the compensation deal.
Lawyers said that the U.S. offered some 2.4 million dollars to the affected families under a blood money deal.
Chairman of the moon sighting committee, Mufti Muneeb-ur-Rahman, argues that the government and families have no right to pardon a spy, saying that the U.S. media had itself called him a CIA agent and was on a secret mission.
Jamaat-e-Islami was quick to stage small demonstrations to condemn the release. The group announced more protest demonstrations in the coming days.
The Tehrik-e-Insaf chief, Imran Khan, condemned the release of the CIA contractor and said the decision would increase militancy. He announced to declare Friday as protest day.
Former Foreign Minister Shah Mehmood Qureshi called upon the government to tell the nation about the "sudden and unexpected" compensation deal.
Opposition leader Chaudhry Nisar Ali Khan said the world will think every Pakistani is for sale. He argued that Davis' release has hit the sovereignty of Pakistan. He asked the government to take the nation into confidence.
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