"I can confirm that all 25 people have been released. Right now they are being taken care of by the Egyptian government and are staying in army accommodation," the assistant to the Chinese ambassador to Egypt told AFP.
The Chinese nationals -- technicians and engineers who work for a military-owned cement factory in central Sinai -- were abducted on Tuesday on their way to work, an Egyptian security official said.
The protesters were demanding the release of five Bedouins held in connection with an attack on the tourist resort of Taba in 2004, part of a series of bombings claimed by an Islamist group.
"They are all well, with no injuries. There was no need to send them to hospital," the Cairo-based assistant, who would not give his name, said over the phone. He refused to give details of how the workers were released.
They said the ruling Supreme Council of the Armed Forces, which took power last year when a popular uprising ousted Egyptian president Hosni Mubarak, had repeatedly promised to release the Bedouins.
The official Xinhua news agency said the workers had been freed by their abductors, but gave no further details of any negotiations.
China's foreign ministry was not immediately available for comment, but in an earlier statement on Wednesday, it warned Chinese companies and personnel working abroad to be on their guard after a similar incident in Sudan.
We "remind Chinese personnel and firms abroad to improve their risk awareness and strengthen security," the ministry said.
The 29 workers in Sudan were captured on Saturday. They have been described as hostages by the Sudanese military but rebels say they were only collateral victims of fighting with government troops.
China dispatched a team to the African nation earlier this week to help secure their release, and the rebel Sudan People's Liberation Movement-North (SPLM-N) holding the workers said they were ready to talk with the delegation.
Beijing has already lodged a formal protest with Sudan over the situation, and has called for the release of the workers.
The SPLM-N was once allied to the former rebels who now rule South Sudan, which gained independence from Khartoum in July last year after decades of civil war.
The oil-rich South Kordofan state remains under Khartoum's administration, but the SPLM-N insurgents have been fighting against the Sudanese army since June, sparking growing international concern over refugees.