After a seven week trial in 2003 a jury found Folbigg guilty of killing her four babies - Caleb, Patrick, Sarah and Laura - between 1989 and 1999.
NSW Attorney General Michael Daley said on Monday he had received an advance copy of a summary of an inquiry by Thomas Bathurst into Folbigg's convictions which found there was reasonable doubt about Folbigg's guilt.
"There is a reasonable possibility that three of the children died of natural causes,' it said.
Mr Bathurst was "unable to accept... the proposition that Ms Folbigg was anything but a caring mother for her children".
Mr Daley recommended to Governor Margaret Beazley that Folbigg be pardoned and she had accepted the recommendation.
"She has now been pardoned," Mr Daley said.
"If she is not out already, she will be soon and we wish her well," he said.
Folbigg was being held at Clarence Correctional Centre in Goulburn.
An inquiry into her convictions in April heard credible evidence they might have died of natural causes.
Folbigg has always maintained her innocence, saying her four babies - Caleb, Patrick, Sarah and Laura - all died of natural causes.
Rare genetic variants later identified in Folbigg and her daughters triggered the second inquiry into her conviction not long after a 2019 examination.
