The Ekiti state government did not say whether a ransom was paid or share details of the students' release.
Kidnapping for ransom by armed gangs, which is common in the northwest, has been spreading across Nigeria as gunmen target villagers, motorists and students.
The state government's statement said the kidnapped students from a private primary school were released in the early hours of Sunday.
"However, the driver of the school bus was killed, reportedly, by the kidnappers," the statement said, adding that the students would be taken to a local hospital for medical treatment and post-trauma therapy.
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