Bahrami, who had refused to marry Movahedi, was disfigured and blinded by him when he threw a jar of acid in her face while she was returning home from work in 2004.
"I feel very good. I'm happy that I pardoned him," Isna quoted her as saying. "For seven years I've been trying to pursue retribution and to prove that the punishment for an acid attack is retribution but today I decided to pardon him. This was my right but in future the next victim might not do the same."
On Sunday, Bahrami asked for financial compensation instead of blinding Movahedi, an option she had previously refused to consider.
Speaking to Isna, Abbas Jafari Dolatabadi, prosecutor general of Tehran, confirmed that Bahrami had pardoned Movahedi and described her move as a "courageous act".
Islam's Sharia law allows for qisas (retribution) but it also advises for clemency, especially before and during Ramadan, which starts on Monday in Iran. "Inflict the same life on him that he inflicted on me," she had told the court.
Bahrami said that international focus on the case was a factor she considered in pardoning Movahedi. "The second reason I decided to pardon him was because it seemed like the entire world was waiting to see what will happen," she said.