Pirates on Friday freed two German tourists they had held hostage in remote northern Somalia since June, local elders and a source close to the gang said.
Hopes for their release rose this week as leaders in the breakaway region of Puntland tried to arrange for a ransom payment to be taken to the kidnappers.
Yusuf, a local man who described himself as an accomplice of the gang, said he was part of the group that carried $1 million (520,500 pounds) to their mountain hideout.
"They have released the two Germans," Yusuf told Reuters by telephone from the small town of Las Qoray. "They are well and we will be taking them to Bosasso."
Local elders confirmed the pair had been freed.
The two Germans were seized off Yemen in June while sailing to Thailand. The pirates ransacked their yacht then took them to northern Somalia by speedboat.
Their release followed the freeing on Tuesday of two Italian aid workers who had been held hostage in the south since May.
Yusuf said the operation almost faltered earlier on Friday after his group heard a rival militia planned to ambush them and steal the ransom.
Eventually, they proceeded with a police escort and reach the gang, which he said numbered about 200.
Somali pirates generally treat their captives well in anticipation of a healthy pay-off.
But in a telephone interview with a German news magazine last month, the two hostages told a different story.
The pair, who Der Spiegel named as Juergen K. and Sabine M., said they were beaten, given little to eat and lived in fear for their lives.
They appealed for the German government to help them and said they feared their captors would eventually shoot them in the legs and leave them for dead.
"We didn't have a lot of money," Sabine M. was quoted as telling the magazine. "But the kidnappers didn't believe us."
Piracy has long been rife off the coast of anarchic Somalia. But it has increased sharply since the start of last year, when the country's weak interim government drove an Islamist movement out of the capital Mogadishu.
