Provincial security chief Gen. Imamuddin Mutmaein confirming the report said the German citizen used to work in a non-governmental organization in the central city of Faizabad.
Gen. Mutmaein further added that the unknown gunmen had kidnapped the German citizen from Batash village on Sunday.
He said Afghan security forces managed to free the kidnapped German citizen following a military operation conducted in Argo district at Danishmandan village on Sunday night.
At least three suspected individuals were also arrested in connection to the incident.
This comes as unknown gunmen kidnapped at least five foreigners including 2 female doctors in remote mountains of Faizabad district earlier last year.
The aid workers employed by Swiss-based aid group Medair were making their way from Faizabad city in rugged northeast Badakhshan province to visit flood-stricken areas when they were abducted about half-way to their destination.
The kidnapping of foreigners has become relatively common in parts of Afghanistan since U.S-backed Afghan forces toppled the Taliban government in 2001, heralding a 10-year anti-insurgent war.
In 2010, 10 foreign medical workers, including six Americans, were killed in Badakhshan in an attack blamed on insurgents.