Stephen Anderson went on a drug-fuelled shooting rampage at his family's lodge at Raurimu in the central North Island on February 8, 1997.
He killed six people, including his father.
A paranoid schizophrenic, he was later found not guilty of the murders by reason of insanity and was securely held in full-time psychiatric care.
Anderson (37) was now living in Upper Hutt, the Sunday News reported yesterday.
His mother, Helen told the paper her son was now "getting on with his life" and "is not newsworthy".
Mental Health director Dr David Chaplow said Anderson's treatment was continuing.
He said that getting Anderson back into the community under strict release conditions would helpto rehabilitate him.
Dunedin woman Daphne Melville's daughter Andrea Brander (52) was killed in the massacre.
Mrs Melville (88) said she had received a shock when she picked up her Sunday newspaper yesterday to read the news Anderson was living freely in the community.
"I'm just heartbroken in a way. It is just so unfair for families to find out these things in the newspaper."
She had complained in 2007 when she learned Anderson was taking longer breaks in the community and was told in a letter of reply from Capital and Coast District Health Board's health victim notification register co-ordinator that registered victims would be advised when the patient was to be discharged.
But neither she nor her daughter's three children had been notified.
"Victims are left high and dry, left in the dark, yet we are affected such a lot by these things," Mrs Melville said.
Mrs Brander (52) was a former pupil of Queens High School.
She met her future husband, Gordon Brander, a Kings High School pupil, while at school.
The couple moved to Wellington about 1985.
Isabel McCarty, shot in the back by Anderson (who also killed her husband, Anthony) is outraged at Anderson's release.
"It is another example of New Zealand not punishing people who do something wrong," Mrs McCarty said.
She said she and other victims of the massacre and their families had previously been informed they would not be formally notified of his release.
At the time of the killings, Anderson was under the care of Capital and Coast's community mental health team in Wellington.
Anderson killed Anthony McCarty (63), Stephen Hanson (38), John Matthews (28), Andrea Brander (52), and Hendrick (Henk) Van de Wetering (51).
He wounded four others.
