Alice Johnson, 63, said Mr Trump had given her another chance in life and restored her to her family.
Kim Kardashian West had lobbied for her release, meeting the president last week.
The White House said Alice Johnson had been a model prisoner and worked hard to rehabilitate herself.
At an emotional reunion with her family outside an Alabama prison, the former prisoner thanked Mr Trump and Kardashian West, saying she was “free to live life and free to start over.”
“I have a lot of catching up to do with my family. I can’t wait to get back on the workforce and get back to my community,” she told a gathering of family members and supporters.
Kardashian West tweeted that her phone call with Alice Johnson was “a moment [she] will never forget.”
Alice Johnson was arrested in 1993 for taking part in a cocaine distribution ring.
She was convicted on charges of attempted possession of drugs and money-laundering in Tennessee.
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Ms Johnson was given a life term without parole.
Hers was not a miscarriage of justice case – Ms Johnson was guilty, but her lawyers argued the sentence was unduly harsh for a first time, non-violent offender.
The president commuted Ms Johnson’s sentence as his seventh act of clemency.
“Ms Johnson has accepted responsibility for her past behaviour and has been a model prisoner over the past two decades,” the White House said in a statement.
Kardashian West joined what has been a long-running campaign for Johnson’s freedom, spearheaded by the clemency foundation CAN-DO, friends and family.
She was first alerted to the issue after spotting a video about the case on social media.
Kardashian West visited the White House with her lawyer, Shawn Holley, and had also linked up with Mr Trump’s son-in-law and presidential adviser, Jared Kushner, who has been lobbying for prison reform.
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