Oleg Kalugin, who has previously revealed details of the KGB's involvement in the assassination, was arrested on Saturday at Heathrow airport and taken to an unspecified police station in central London.
Itar-Tass, the Russian news agency, reported that Mr Kalugin expressed his readiness to co-operate with the British authorities over the murder before being released without charge last night.
Mr Kalugin had been invited to take part in an edition of the BBC's Panorama programme about MI6, the British intelligence service.
Mr Markov, 49, a writer and broadcaster, died four days after he was injected with poison in September 1978 on Waterloo bridge near the Bush House headquarters of the BBC World Service, where he had worked since fleeing Bulgaria in 1969.
The device used to inject the poison was concealed in an umbrella. It is thought that a spring-loaded gadget was used to fire a small metal pellet containing ricin, a highly toxic poison derived from castor oil seeds, into Mr Markov's thigh.
In 1990, the Bulgarian authorities admitted that Mr Markov's death had been ordered by Todor Zhivkov, the President of Bulgaria at the time, who was upset by Mr Markov's anti-Communist broadcasts.
Mr Kalugin has previously published details of how the Bulgarians approached Moscow for help in carrying out the assassination. He said he was at a meeting with senior KGB personnel at which a Bulgarian request for assistance was discussed.
It seems that there was a request for 'technical assistance' from Moscow which was also, in effect, a personal plea from Mr Zhivkov to his patron in Moscow, the then Soviet President, Leonid Brezhnev. Although the Russians were apparently involved in the planning of the murder, it appears that it was carried out by Bulgarians.
Mr Kalugin, who left the KGB three years ago in disgrace after he accused his bosses of failing follow the principles of glasnost, arrived on Saturday at the invitation of the BBC. A spokeswoman said he had visited Britain openly a number of times and on this occasion asked the BBC to inform the British embassy in Moscow of his visa application.
Last year Stoyan Savov, a former Bulgarian general, died in mysterious circumstances after being charged in connection with the Markov killing. It was unclear whether he shot himself or was killed by someone else.Reuse content