Collins agreed to pay a $1900 fine before his release from custody in the industrial city of Hamamatsu at 3pm yesterday Japan time (7pm NZT), lawyer and manager Tim Castle said.
Collins, 32, had been in custody since the evening of Sunday, March 17, following his arrest at a city department store for carrying two knives.
"Late yesterday Jerry agreed to pay a fine of 150,000 yen (about $1900) and admitted his possession of the knives, contrary to the provisions of the local sword control regulations, as terms for his release," Mr Castle said in a statement.
Collins' father Frankie Collins last night told the Herald his son would return to New Zealand but was yet to speak to him to confirm details.
"He's going to be arriving in New Zealand (his) lawyer said, and that's what we are waiting for, him to get home," he said.
He looked forward to speaking with his son and was relieved to hear of his release.
"I am, I'm very very happy."
Mr Collins was in the dark about what had gone on in Japan.
"We just have to find out the real story or what was happening. At the moment I don't know what has been happening."
Frankie Collins had heard media reports of his son's fears that a gang of Brazilians were targeting him but didn't know what to make of it until he had spoken with his son.
Collins, 32, told TV3's John Campbell this week that he had a "misunderstanding"with a gang in Japan.
He believed he was being followed on the day of the incident, resulting in his walking behind a counter at the upmarket store and taking out a knife in front of frightened staff. Collins said he believed he wouldn't be attacked around so many people.
Rumours he was on drugs were not true and all tests had come back negative. He said he was treated "very kindly and very generously"in prison.
A Ministry of Foreign Affairs spokesman confirmed the consul from the New Zealand Embassy in Tokyo had been involved in Collins' case over the past week.
He could not comment on whether Collins would have to leave Japan as part of his release.
