A throng of well wishers decked in #SAVEHAKEEM T-shirts cheered and sang the football anthem "You'll Never Walk Alone" as they greeted the 25-year-old defender at Melbourne Airport, after an overnight flight to freedom aboard Thai Airways flight 465.
"I want to thank Australia" said a smiling Araibi "this is my country."
"I don't have citizenship yet, but my country is Australia. I will die in Australia and I love Australia," he said.
Araibi was detained on November 27 while on honeymoon at the request of Bahraini authorities who accuse him of offences linked to the 2011 Arab Spring uprisings.
His detention sparked worldwide outcry and a protracted diplomatic dispute between Bahrain, Thailand and Australia that raised questions about the neutrality of Interpol and the writ of Canberra's refugee protections.
Araibi had expressed fear that he would be tortured and killed if he returned to Bahrain and supporters alleged his prosecution was politically motivated.
Prime Minister Scott Morrison led celebration of Araibi's release, saying many Australians' prayers had been answered.
"Hakeem is coming home," he said in Canberra. "We have seen the picture of him on the plane, with a smile on his face, and that's great to see."
Morrison thanked the Thai authorities, who had earlier left his written appeals for Araibi's return unanswered, but abruptly dropped extradition proceedings on Monday at Bahrain's request.
"We have been informed that Bahrain wants to withdraw the (extradition) request... if they don't want him, we have no reason to keep him here," Chatchom Akapin, a director-general in the Thai prosecutor's office, told AFP.
The case had also become a cause celebre in the football world, with stars like Didier Drogba calling for Araibi's release and FIFA urging the Thai football authorities to intervene.
The international football governing body on Monday thanked Thailand in a statement for "doing the right thing" and said it hoped the athlete "will be able to resume his footballing career soon".
'Cruel and inhumane'
Former Australian football captain Craig Foster, who led a campaign in the sporting community for Araibi's freedom, expressed his "deepest gratitude" for the news.
"My thanks go to the wonderful people of Thailand for your support and to the Thai (government) for upholding international law," Foster posted on Twitter.
Sayed Ahmed Alwadaei, of the Bahrain Institute for Rights and Democracy, said the case had brought the plight of others imprisoned in the country to light.
"Two moments captured the world's attention this month: the photo of footballer Hakeem al-Araibi shackled and barefoot, and the moment of Hakeem breaking the chains and reunited with his beloved wife, friends and the football community in Melbourne."
Kasit Piromya, a board member of the lobby group ASEAN Parliamentarians for Human Rights, said the footballer's case showed the failings of Thailand's "outdated" laws and policies.
Thailand's treatment of refugees has been thrust under international scrutiny in recent weeks.
In January, an 18-year-old Saudi woman who ran away from her family arrived in Bangkok's airport, and armed with a smartphone and a captive Twitter audience managed to outmanoeuvre Thai authorities and gain refuge in Canada following her pleas for asylum from her "abusive" family.
Bahrain's reversal of Araibi's extradition is surprising.
Only last week the Gulf state issued a statement defending its decision to pursue the footballer after he fled while awaiting trial, and he was convicted in absentia in 2014 for damaging a police station.
But Araibi says his prosecution was motivated by his criticism of Asian Football Confederation president Sheikh Salman bin Ebrahim Al Khalifa, a member of Bahrain's ruling family.
A statement from Bahrain's foreign ministry on Monday said it "takes note of the halt in legal proceedings" though it did not confirm it had withdrawn its extradition request.
"The guilty verdict against Mr. Al Araibi remains in place.... (Bahrain) reaffirms its right to pursue all necessary legal actions against (Araibi)," the statement said.
The reversal came a day after Thailand's foreign minister met with Bahrain's Crown Prince Salman bin Hamad Al Khalifa in Manama to "discuss... areas of interest", according to Bahrain's state-run news agency.