CIA contractor released from prison after paying "blood money" to victim's families.

Islamabad, Pakistan (CNN) -- A CIA contractor who killed two Pakistani men was released from jail Wednesday after $1.4 million in compensation was paid to their families, according to a lawyer closely connected to the case .

Raymond Davis -- who has now left Pakistan, according to a U.S. official not authorized to speak for attribution -- had been in jail since January in a case that has strained the always tense relationship between the United States and Pakistan.

The families of two men he killed forgave him, a government official said Wednesday.
Davis' immediate destination after being released was unclear.

The U.S. official insisted that the release of Davis was a decision made by the Pakistanis, and that there was "no quid pro quo" between Washington and Islamabad. The official refused to comment on whether there was a exchange of so-called "blood money."

"The families of the victims ... have pardoned Raymond Davis," said Cameron Munter, the U.S. ambassador to Pakistan. "I am grateful for their generosity. I wish to express, once again, my regret for the incident and my sorrow at the suffering it caused."

Punjab province law minister Rana Sanaullah first told Pakistani media Wednesday that the victims' families did not want to press charges and added soon after that Davis was free to go.
The statement came just hours after the American was charged with murder in connection with the January shootings.
Davis appeared in court after the payment was made and was acquitted of the charges, in accordance with an Islamic practice known as diyat, or compensation, the lawyer said.

"Diyat," a part of Islamic law that is enshrined in Pakistan's penal code, allows victims to pardon a murderer with or without being paid "blood money," the former chief justice of Pakistan's Supreme Court, Saeed U Zaman Saddiqi, told CNN.
On a second charge, illegal possession of a firearm, Davis was fined $250 and sentenced to time already served, the lawyer noted.

According to Davis, the January 27 shooting occurred after two men attacked him as he drove through a busy Lahore neighborhood, the U.S. Embassy has said. Munter said Wednesday the U.S. Justice Department has opened an investigation into the incident.
The United States had been seeking the release of Davis on the grounds that he has diplomatic immunity.

But a high court in Pakistan refused Monday to decide whether the CIA contractor has diplomatic immunity, sending the case back to a lower court, the official Associated Press of Pakistan reported.

The lower court had already ruled that Davis does not enjoy protected diplomatic status because neither he nor the Pakistani government has provided documents proving that he does.

U.S. officials originally said Davis was a diplomat and later revealed that he is a CIA contractor, intensifying the already highly charged situation.
Pakistan is a key U.S. ally in efforts against al Qaeda and the Taliban in neighboring Afghanistan, and the shooting deaths outraged many Pakistanis.
CIA spokesman George Little said Wednesday the agency and its "Pakistani counterparts have had a strong relationship for years.

"When issues arise, it's our standing practice to work through them," Little said in a statement. "That's the sign of a healthy partnership -- one that's vital to both countries, especially as we face a common set of terrorist enemies."
CNN's Pam Benson and journalists Nick Paton Walsh and Nasir Habib contributed to this report.