The swap operation began Wednesday morning on the Lebanese-Israeli border, in line with an agreement reached with mediation from the United Nations and the Red Cross.
Hezbollah earlier delivered coffins containing the bodies of two Israeli soldiers the group captured in 2006 in a cross-border raid. The abduction of Eldad Regev and Ehud Goldwasser sparked a month-long war in which more than 1,200 Lebanese civilians died. Israel has confirmed the identity of the two bodies.
The Islamic group had refused to say whether the soldiers were alive or dead until just before the morning handover.
The prisoners released by Israel include Samir Kantar, convicted of killing three Israelis including a four-year-old girl in 1979. Kantar, who was 16 at the time of the murder, had been behind bars for almost 30 years.
While Israel mourns the deaths of its soldiers, Hezbollah has given a hero's welcome to the five returning militants. Israel also returned the remains of 199 Lebanese and Palestinian militants.
The prisoner swap has been widely criticized in Israel, with the country's media saying that the unbalanced deal heavily favors Hezbollah, and will serve as a major propaganda coup for the group.
