Somali pirates have freed a Greek-owned bulk carrier held off the Horn of Africa coast for seven months after a multi-million dollar ransom was air-dropped to secure its release, a pirate source and local maritime expert said on Friday.

We have received a $3.5 million ransom and abandoned the ship, a pirate who identified himself as Hussein told Reuters by telephone from the coastal village of Ras Bina.

Pirates hijacked the Panamanian-flagged MV Dover in late February about 260 nautical miles north east of Salalah in Oman, taking the 23-strong crew hostage.

The MV Dover is free. She is currently steaming out to safe waters, confirmed Andrew Mwangura, maritime editor of the Somalia Report and a former regional maritime official.

Mwangura said there was no immediate word on the crew's well-being.

Somali pirates in the past have typically not harmed crew members during ransom negotiations with ship owners, but shipping companies say the armed gangs are becoming increasingly violent.

The lawless nation has been mired in violence and awash with weapons since the overthrow of a dictator two decades ago, allowing piracy to flourish off the lawless nation's shores.

Preying on merchant vessels and pleasure boats, the pirates rake in tens of millions of dollars a year in ransoms.