Hamas said Mohammed Dababesh, believed to be the head of the Hamas general security service, had returned to the Palestinian territory.
"The release came as a result of contacts between the Hamas leadership and Egypt. It was also proof that the reported allegations were false and incorrect," said Hamas spokesman Sami Abu Zuhri.
Dababesh, a senior member of Hamas' internal security service, was detained on Sept. 13 upon landing in Cairo airport from Damascus.
The release was confirmed by Egyptian security officials.
Dababesh was "suspected of involvement in activities harmful to Egyptian state security, including an attempt to traffic a significant quantity of sophisticated telecommunications equipment," the state-owned daily Al-Ahram said after his arrest.
He was also accused of being responsible in his capacity as security chief for the death in January of an Egyptian policeman during an exchange of fire at the Gaza border.
On Tuesday, Hamas denied the allegations against Dababesh, saying the arrest was a "real mockery of Egyptian-Palestinian relations."
Abu Zuhri said at least 40 members of Hamas and other Palestinian factions remained in Egyptian custody, and called for them to be freed too.
"We hope that the (Dababesh) release will be the first step toward righting relations between Hamas and the Egyptian leadership and bringing an end to detention of Palestinians in their jails," he said.
The Egyptian-Gaza border is tightly controlled to prevent smuggling from the Sinai desert.
Cairo has also tried, without success, to heal a violent schism between Hamas and and the US-backed government of Palestinian President Mahmoud Abbas, which holds sway in the Israeli-occupied West Bank.
Hamas has controlled Gaza since June 2007 when it ousted forces loyal to Abbas. It is strongly opposed to renewed peace talks between Abbas' Palestinian Authority and Israel.
