The Islamic extremist movement handed over 10 women and two men to tribal elders in three separate releases several hours apart outside the central town of Ghazni.
VIDEO: Hostages freed
The aid workers were then driven to safety in Red Cross vehicles.
The International Committee of the Red Cross (ICRC) confirmed that 12 hostages had been released and taken to the Red Crescent Society offices in Ghazni, south of Kabul.
ICRC representative Greg Muller said they looked in good shape.
The freed hostages were among 23 Christian aid workers kidnapped by Taliban militants on July 19.
Two male captives were executed by their captors and two female hostages were freed earlier this month.
The South Korean embassy in Kabul said the freed hostages were likely to be flown to the US military base at Bagram, north of Kabul, before leaving Afghanistan "as soon as possible."
The releases came a day after the Taliban announced it would free all the hostages in the wake of South Korea's pledge to withdraw its military force from Afghanistan and ban missionary groups from the country.
The agreement came in face-to-face talks between Taliban negotiators and South Korean diplomats in Ghazni.
The Taliban said the remaining hostages would likely be freed today.
The United States welcomed the release, but refrained comment on whether the agreement for their freedom set a dangerous precedent.
Amid speculation over whether a ransom was paid, both the Taliban and the South Korean government denied there was any secret deal.
The hostage-takers said it would take several days to free all the captives as they were in different areas.
News of the deal triggered tears of relief from their relatives who have been watching and praying for their lives since they were seized on a bus travelling from Kabul to the southern city of Kandahar.
The South Korean government promised to pull out its 200 troops in medical and engineering units from Afghanistan by the end of the year — something it was already planning to do.
The government has also imposed a ban on all unauthorised travel to the war-torn nation.
The Taliban killed the two hostages to press their demand for the release of jailed fighters, but the Afghan government rejected any such swap.
Presidential spokesman Cheon Ho-Seon said in Seoul said the insurgents apparently accepted assurances by Seoul that it was powerless to influence the Kabul government to release prisoners.
The kidnappings are among a series of incidents blamed on the Taliban, who are waging a bloody insurgency against the Kabul government and its coalitionallies that has spiralled in intensity over the past year.
A German engineer is still being held in Afghanistan.