Santos, who was expelled from Congress after a brief, scandal-plagued tenure, had pleaded guilty to inflating fundraising figures and falsifying donor names to secure Republican Party financial support during the 2022 election cycle.
He was elected that year to represent a portion of New York City and its eastern suburbs.
During his campaign, Santos falsely claimed he attended New York University, worked at Goldman Sachs and Citigroup, and that his grandparents had fled the Nazis during World War II.
Trump said Santos had been "horribly mistreated" in prison.
"George Santos was somewhat of a 'rogue', but there are many rogues throughout our country who aren't forced to serve seven years in prison," Trump said on his Truth Social platform.
"Therefore, I just signed a commutation, releasing George Santos from prison IMMEDIATELY," he added.
Santos spent much of his 11-month term engulfed in scandal, sidelined by fellow lawmakers, and mocked by late-night comedians after it was revealed he had fabricated much of his personal history.
Santos' commutation is Trump's latest high-profile act of clemency for former Republican politicians since retaking the White House in January.
In late May, he pardoned former US representative Michael Grimm, a New York Republican who in 2014 pleaded guilty to under-reporting wages and revenue at a restaurant he ran in Manhattan.
He also pardoned former Connecticut governor John Rowland, whose promising political career was upended by a corruption scandal and two federal prison stints.
With AP
