U.S. Navy photos showed a parachute, carrying what they described as "an apparent payment," floating toward the tanker, which had been held with its 25-member since Nov. 15.
Mohamed Said, a negotiator with the pirates, told The Associated Press by telephone the ship was released and traveling to "safe waters" after the payment of $3 million, far less than the $25 million initially sought.
The owner of the Liberian-flagged tanker, Vela International Marine Ltd., declined to comment on the claim. Combined Military Forces patrolling the waters issued a statement saying, "It appears Somali pirates have received payment for the very large crude tanker Sirius Star."
The seizure of the Sirius Star, which is the size of an aircraft carrier and filled with two million barrels of oil valued about $100 million, capped a string of increasingly audacious attacks by Somalian pirates. Not only was it the largest ship to have been hijacked, it was taken in the Indian Ocean more than 500 miles southeast of Mombasa, Kenya, demonstrating growing capability on the part of the pirates.
Until then, most hijackings had occurred closer to the Somali coast in the Gulf of Aden, one of the busiest shipping channels in the world, leading to and from the Suez Canal.
International efforts to combat piracy have increased since the tanker's capture and its release comes one day after the Navy announced that a new international force under American command will soon begin patrols to confront Somali pirates.
Over a hundred ships were attacked last year. More than a dozen with about 300 crew members are still being held by pirates off the coast of Somalia, including the weapons-laden Ukrainian cargo ship MV Faina, which was seized in September.
"While the potential release of the Sirius Star is undoubtedly excellent news, we must not forget that nearly three hundred other merchant mariners are still being held captive. The men who attacked the ship and held the crew hostage are armed criminals and consequently, we must remain steadfast in our efforts to address the international problem of piracy," said Commodore Tim Lowe, deputy commander of the new force.
Between 12-14 international warships currently patrol the waters off the coast of Somalia in the Indian Ocean at all times seeking to prevent pirate attacks on cargo vessels, according to Cmdr. Jane Campbell, spokeswoman for the Combined Maritime Forces in Bahrain.
The area they cover is nearly four times the size of Texas and despite the heavy naval presence - backed by the ships' own reconnaisence helicopters and long-range maritime patrol aircraft - four cargo vessels have been snatched in the past month alone.
"The biggest part is coordination, because it's such a vast area to cover," Campbell said."
The newest mission - expected to begin operations next week - appears more of an attempt to sharpen the military focus against piracy rather than expand offensives across one of the world's most crucial shipping lanes.
The force will carry no wider authority to strike at pirate vessels at sea or specific mandates to move against havens on shore -- which some maritime experts believe is necessary to weaken the pirate gangs.
The pirates are trained fighters, often dressed in military fatigues, using speedboats equipped with satellite phones and GPS equipment. They are typically armed with automatic weapons, anti-tank rocket launchers and various types of grenades. Far out to sea, their speedboats operate from larger mother ships.
Most hijackings end with million-dollar pay-outs. Piracy is considered the biggest moneymaker in Somalia, a country that has had no stable government for decades. A recent report by the London-based think-tank Chatham House said pirates raked in more than $30 million in ransoms last year.
The U.S. Navy and other nations have international authority to battle pirates in the open seas and come to the aid of vessels under attack. But forces have been stymied on how to respond to ships under pirate control, fearing an all-out assault could endanger the crew members held hostage.
Other ships being held include the Ukrainian cargo ship, which is carrying 33 battle tanks.
Relatives of the crew say that neither government authorities nor the owner of the MV Faina are giving them any information about negotiations with the captors or their loved ones' health. On Friday, they appealed to international humanitarian groups for help.
Pirates and Ukrainian authorities both said in December that a deal had been reached and that the seamen would be released soon. But there has been no sign of progress since then. The pirates had originally demanded $20 million when they hijacked the Faina.