Lynagh, who won the World Cup with Australia in 1991, was admitted after complaining of blurred vision and headaches following a long-haul flight from London, where he now lives, to Brisbane.
But after a fortnight of intensive treatment, the Royal Brisbane and Women's Hospital have confirmed he is to be released.
The hospital will hold a press conference tomorrow while Lynagh tweeted: "I would like to thank all the Doctors, Nurses and Staff at the Royal Brisbane Hospital. They were fantastic and are real heroes.
"Almost exactly two weeks after my stroke, I have been released from hospital. A long way to go, but a big step in the right direction."
Lynagh won 72 Test caps and retired from international rugby in 1995 as the world record points scorer with 911, a total which remains an Australian record.
An inspirational playmaker Lynagh, who also won 100 caps for Queensland, made his Test debut in 1984 and he was part of Australia's Grand Slam-winning team later that year.
Lynagh was vice-captain of Australia's World Cup-winning side in 1991 and he scored the late winning try against Ireland in the quarter-finals.
After captaining Australia to the quarter-finals of the 1995 World Cup, Lynagh retired from international rugby and joined Saracens at the start of the professional era.
Lynagh was the club's first major signing after Nigel Wray had taken control of the club and he helped attract Philippe Sella, Francois Pienaar and Kyran Bracken to the club.
Lynagh spent two years at Saracens, guiding them to a 48-18 victory over Wasps in the 1998 Tetley Bitter Cup final and he has been enrolled in the club's Hall of Fame.