At the news conference in Kyiv where they revealed the plot, Babchenko emerged to gasps and applause from reporters, who were dumbstruck by the news.
"Of course now, I would have to express my deep condolences to the family of Arkady Babchenko", said Vasyl Hrytsak, head of the SBU.
Babchenko was a former soldier and one of Russia's best-known war correspondents.
Commenting on the revelation that Babchenko is alive, Russian Foreign Ministry spokeswoman Maria Zakharova said, "It's of course great news that Babchenko is alive".
"We are relieved that Arkady Babchenko is alive", the group said.
No stranger to death, Babchenko served in the Russian army during Chechnya's two wars for independence, after which he wrote a powerful memoir about the everyday brutality of conflict before turning to journalism, writing about war for a range of Russian publications.
Babchenko left Russian Federation in February 2017 after receiving threats, living first in the Czech Republic, then in Israel, before moving to Kiev.
He reported on Russia sending private military contractors into Syria and the downing of Malaysia Airlines Flight MH-17 in July 2014 over eastern Ukraine, for which investigators on Friday held the Russian state responsible, something it denies.
Arkady Babchenko was said to have been killed in his apartment building in the Ukrainian capital Kiev Tuesday.
The Kremlin described such allegations as part of an anti-Russian smear campaign.