Bernard Phelan, who also holds Irish nationality, and Benjamin Briere were freed from their prison in the northeastern city of Mashhad and are "on their way to France", Foreign Minister Catherine Colonna said.
There had been grave concerns about the health of both men, both of whom had been on hunger strikes to protest their conditions.
President Emmanuel Macron added on Twitter: "Free, finally. Benjamin Briere and Bernard Phelan can reunite with their loved ones. It's a relief".
The flightradar24.com website showed that the Dassault Falcon plane had taken off from Mashhad around 1100 GMT and was due to touch down at Paris Le Bourget airport -- no longer used for commercial flights -- after 1700 GMT.
Benjamin Briere's sister Blandine Briere, who has led the campaign for his release during her brother's two-year ordeal, told AFP: "We are avoiding a tragedy. I have no words to describe the joy we feel."
"We cannot tell you how relieved we are," added Phelan's sister Caroline in a statement.
The pair were among some two dozen foreigners jailed in Iran who campaigners see as hostages held in a deliberate strategy by Tehran to extract concessions from the West.
Phelan, 64, a Paris-based travel consultant, was arrested in October in Mashhad and has been held ever since.
In April, he was jailed for six and a half years on national security charges strongly rejected by his family.
With Iran rocked by anti-regime protests since September, Phelan was accused of taking photos of a burned mosque and police officers, and sending images to a British newspaper, the family said.
Phelan went on a dry hunger strike in January to protest his detention, refusing both food and water. But he stopped the action at the request of his family, who feared he would die. They said his health had deteriorated considerably in detention.
"The last seven months have been a very difficult ordeal for Bernard and for his family and I am pleased and relieved that this is now at an end," said Irish Foreign Minister Micheal Martin.
Briere, 37, was first detained while travelling in Iran in May 2020 and later sentenced to eight years in prison for espionage.
Although acquitted by an appeals court, he remained in prison in a situation described as "incomprehensible" by his family.
Held like Phelan in the prison of Vakilabad in Mashhad, Briere also went on hunger strikes to protest his conditions.
Briere's France-based lawyer Philippe Valent said he had started his latest hunger strike on January 28.
"This release had to happen before there was a catastrophe. There was a real risk to his life," he told AFP.
'Regain full freedom'
Four more French citizens, described previously as "hostages" by the French foreign ministry, are still in prison by Iran.
Colonna said she had spoken earlier Friday to her Iranian counterpart Hossein Amir Abdollahian and made clear "France's determination to ensure that the other French citizens still detained in Iran also rapidly regain their full freedom".
Iran's foreign ministry described the release of Briere and Phelan as a "humanitarian action".
Macron added: "We will continue to work for the return of our compatriots still detained in Iran."
Cecile Kohler, a teacher, and her partner Jacques Paris were arrested in May last year and remain in prison accused of espionage charges their family deny.
Louis Arnaud, described by his family as an innocent traveller, was arrested in September. Another French citizen is confirmed to be held by Paris but has never been named.
French-Iranian academic Fariba Adelkhah was released from prison in February but appears still unable to leave the country.
Several US, German, British, Swedish and other European citizens also remain detained.
Colonna told a meeting of EU foreign ministers in Stockholm that Europe would work for the release of "all Europeans, too many unfortunately, detained without reason in Iran".
The holding of foreigners by Tehran has increased tensions with the West at a time when the Islamic republic is also under scrutiny for its crackdown on the protest movement that erupted in September.
Talks between Iran and the West on reviving the 2015 deal on its nuclear programme are frozen.
Activists are also alarmed by a surge in the number of executions by Iran. On Saturday, Tehran hanged Swedish-Iranian dissident Habib Chaab on terrorism charges.
German citizen Jamshid Sharmahd and Iranian-Swedish national Ahmadreza Djalali also face execution after being sentenced to death in trials denounced as a sham by their families.