It is the first time she has been allowed out of prison since her arrest in April 2016 and conviction last year for plotting to overthrow the Iranian regime – something she has always denied.
The 40-year-old, from Hampstead, north London, has travelled to see her family in Damavand, north east of Tehran, the Free Nazanin campaign confirmed.
She was called on Thursday morning while still in her night clothes and was told she had 10 minutes to get ready because she was being temporarily released from Evin prison.
Mrs Zaghari-Ratcliffe, who is Iranian-British, “dressed and packed quickly as her cellmates gathered round,” the campaign said.
She has been promised she would be granted a temporary release – furlough – a number of times over the past few weeks, but had not held out much hope of it happening.
She said: “It will be just awesome for Gabriella to have mummy home finally.
“We can play with her dolls house, and she can show me her toys.
“The thought of brushing her hair, and giving her a bath, of being able to take her to the park, and feed her, and sleep next to her – it just kills me. It is still so hard to believe.
“I wasn’t expecting it at all when it was mentioned two weeks ago.
“I didn’t tell Gabriella or for a long time my mum – so if it didn’t happen I would be the only one to suffer.
“I was so emotional to see my grandmother today. I cried so much. I felt so overwhelmed. My dad’s home is not my home – but it is so much better than prison.
“People in the ward were so excited – they sang songs and danced. I baked for them in celebration. It felt like this really could be the beginning of the end.”
Foreign Secretary Jeremy Hunt tweeted that it was “really good news” and down to “tireless campaigning” by her husband and friends.
He said it was important not to forget that she “shouldn’t be in prison in the first place” and promised to continue to push for her permanent release.
The Free Nazanin campaign said her temporary release came after “positive meetings” with Mr Hunt this month, who is considering providing her with diplomatic protection.
Guards searched every item she was taking with her before leaving the prison and told her she could not call her family from the prison, but could do from the gate – where she was then told the phones were not working.
Her family, unknown to her, had been called by prison authorities an hour earlier but were away with relatives in Damavand for Eid.
She was told she could not wait outside the prison so crossed over a bridge and asked the family of another prison to borrow their phone to call her brother who was in Tehran.
He rushed over and collected her within 10 minutes before her father arrived.
Her husband, Richard Ratcliffe, is in the UK where he is going to Edinburgh Fringe to watch the Nazanin’s Story play.
Iran has refused to grant him a visa to visit his wife and daughter, Gabriella, who is staying with family in Tehran.
Gabriella had picked some flowers from the garden to give to her mother.
Mrs Zaghari-Ratcliffe is not allowed to conduct any media interviews while on release, or visit the grounds of any foreign embassy and should not attempt to leave the country.
She and her father have both promised that she will obey these rules.
Other prisoners released for a few days are still out a month later – something Mrs Zaghari-Ratcliffe hopes will happen to her.