The release mechanism of avian reovirus (ARV) from host cells is orchestrated by several pathways and many of these mechanisms remained elusive. Here, we report that inhibition of exosome proteins CD81 and CD63 significantly reduced the relative release of the virus. We observed that ARV induced exosome protein expression over time and found that p17 protein play a pivotal role in virus release. Immunofluorescence assays revealed that ARV virions are coated with autophagosome and are then transported to the extracellular vesicles for release. Suppression of autophagosome maturation with Thapsigargin (TG), bafilomycin A1, or Rab7a shRNA disrupts fusion with lysosomes, resulting in a substantial drop in both the viral release ratio and virus titers. To further identify whether the virus uses autophagy to transfer nascent virus to exosomes as mechanism to avoid degradation caused by bone marrow stromal cell antigen-2 (BST-2), depletion of BST-2 by the shRNA increased virus release and virus titer. Inhibition of autophagosome maturation with TG resulted in a decrease in viral protein levels and virus release, confirming a crucial role of autolysosome formation in virus release. Furthermore, knockdown of BST-2 moderately reversed TG-modulated inhibition of virus release. Taken together, this study provides novel insights into ARV-induced autolysosome and suppression of BST-2 enhancing progeny viruses to extracellular vesicles (EVs) for release.