Salah Hamouri, 33, was freed at Jerusalem police headquarters after being brought from his cell in a prison in southern Israel's Negev desert.
Attorney Mahmud Hassan told AFP that under the terms of his release Hamouri was forbidden to take part in any celebrations, demonstration or protests for a period of 30 days and required to post a bond of 3,000 shekels ($825, €700).
He was arrested at his home in Israeli-annexed east Jerusalem on August 23, 2017 and subsequently interned under what Israel calls administrative detention, which allows detention without trial for renewable six-month periods.
Neither suspects nor their lawyers are informed of the reasons for arrests and Israel's Shin Bet domestic intelligence agency had no immediate comment when asked by AFP for the reasons behind Hamouri's detention.
French President Emmanuel Macron and Foreign Minister Jean-Yves Le Drian had discussed his case several times with Israeli Prime Minister Benjamin Netanyahu, according to the French foreign ministry.
Israel says administrative detention is intended to allow authorities to hold suspects while continuing to gather evidence, with the aim of preventing attacks or security offences in the meantime. But the system has been criticised by Palestinians, human rights groups and members of the international community who say Israel abuses the measure.
Hamouri was born in east Jerusalem to a French mother and a Palestinian father.
Palestinian prisoner support NGO Addameer, which employed him as a field researcher, said he was first arrested and placed under administrative detention in 2001, aged 16.
He was interned without trial for another five-month stretch in 2004, it said, then arrested again in 2005.
Following that arrest, he was tried and convicted by an Israeli court on charges of plotting to assassinate Ovadia Yossef, a prominent Israeli rabbi and spiritual leader of the ultra-Orthodox Shas political party.
Hamouri was released in December 2011 as part of a swap of over 1,000 Palestinian prisoners for Gilad Shalit, a soldier held captive in Gaza for more than five years.
He has always maintained his innocence.
Addameer says more than 5,500 Palestinians are currently held in Israeli jails, including approximately 450 in administrative detention.