Priebke was jailed for life in 1998 for his role in the WWII massacre of 335 Italians at Rome’s Ardeatine Caves.
But because of his age and poor health, he was allowed to serve his sentence under house arrest in the capital.
The move caused anger over what some people in the city regarded as conditions that were far too comfortable and lenient.
Priebke was one of the SS officers present during the killing of men and boys at the caves in 1944, in a reprisal attack ordered by Adolf Hitler for the killing of 33 German soldiers in Rome by resistance fighters.
He was among the officers who oversaw the operation to round up victims and transport them to a network of caves on the outskirts of the city where they were all shot.