Opposition leaders, some Western diplomats and human rights activists had also called for his immediate and unconditional release.
Nyagali's disappearance triggered an online campaign in Tanzania with the hashtag #BringBackMdudeAlive trending on Twitter for several days, and drew international attention.
"Good to hear he has been found. I hope there will be an investigation into what happened," Sarah Cooke, the British High Commissioner to Tanzania, tweeted.
Canadian High Commissioner to Tanzania, Pamela O'Donnell, had described the activist's disappearance as "very disturbing" and expressed hope that the Tanzanian government would do everything possible to bring him back alive.
Tanzanians took to social media to demand answers from the government about recent incidents of politically-related kidnappings and torture and the attempted assassination of vocal opposition MP Tundu Lissu in Sept. 2017.
"We demanded and got him back alive - thank God!" Maria Sarungi, a social media activist who led an online campaign to push for the activist's release, said on Twitter on Thursday.