A judge in the African nation's capital of Lilongwe handed Lu Ke, 27, a 12-month sentence after the man found guilty of procuring children to take part in entertainment and racially exploiting them.
Public prosecutor Masauko Chamkakala said Lu, who was arrested last year, was given seven days to leave Malawi, having already served his time behind bars.
"He has already served 12 months, hence his immediate release," Chamkakala told AFP.
Lu allegedly filmed children singing racist chants about themselves in Chinese -- which they did not understand -- and then sold the videos on Chinese social media.
In one video, a young child aged about nine was heard saying: "I am a monster with low IQ."
Chamkakala said Lu has paid compensation to the victims but declined to disclose the amount.
Lu was arrested in June last year in neighbouring Zambia for illegal entry after fleeing there and was later extradited back to Malawi.
When the allegations surfaced, the Chinese embassy in Malawi condemned the accused's actions in a statement, saying "the Chinese government has zero tolerance for racism."
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