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BERLIN, March 12 (Reuters) - A German man held in Iran for over a year for illegally entering the country has been released, German Foreign Minister Frank-Walter Steinmeier said on Monday.

German Donald Klein and Frenchman Stephane Lherbier were detained in late 2005 when Iran's coast guard intercepted a boat they were travelling on near Abu Musa, an island in the Gulf claimed by both Iran and the United Arab Emirates.

Lherbier was pardoned by Iran's supreme leader Ayatollah Ali Khamenei and released last month. The Islamic Republic had said it was also reviewing Klein's case.

"I am both happy and relieved that we have finally succeeded in ending Mr. Klein's detention," Steinmeier told reporters in Berlin.

"The long, unlawful detention of Mr. Klein weighed on our bilateral relations with Iran. I am therefore relieved that Iran's leadership has agreed to free him."

He said the embassy in Tehran was working to return Klein to Germany as quickly as possible.

A German diplomat told Reuters in Tehran: "I can confirm that he was released and now is being looked after by the embassy staff." The diplomat declined to give further details.

(Additional reporting by Edmund Blair in Tehran)

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