Ali, who suffers from Parkinsons disease, was released on Tuesday night and is now recuperating at home.
His representatives, Boxcar PR, released a statement saying: "Muhammad Ali was released from the hospital last night.
"After further observation and testing, doctors determined that Ali was suffering from a severe urinary tract infection not pneumonia as originally diagnosed.
"The boxing legend has fully recovered and is now at his home."
Ali family spokesman Bob Gunnell went on to reveal that the 72-year-old is looking forward to celebrating his birthday next Saturday with friends and family.