Mohammed Allan was arrested in November 2014 and held under a measure known as administrative detention, which allows imprisonment without trial for six-month periods renewable indefinitely.
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In June, he began a two-month hunger strike that brought him near death and heightened tensions in the occupied West Bank.
Israel's High Court suspended his detention on August 19 as he was given medical treatment following his hunger strike, which twice left him in a coma.
His detention was renewed in September after his health improved and he was discharged from hospital.
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Allan then resumed his hunger strike, only to call it off two days later. Later in the month, the Israeli army announced his detention would not be renewed and he would be released on November 4.
A prison service spokeswoman confirmed Allan would be released later on Wednesday, without providing further details.
The radical group says the 31-year-old lawyer from Einabus, near the northern West Bank city of Nablus, is a member.
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Israel's Shin Bet internal security agency says that before his arrest, Allan "was in contact with an Islamic Jihad terrorist" with the aim of carrying out large-scale attacks.
He was previously imprisoned from 2006 to 2009 for allegedly seeking to recruit suicide bombers and aiding wanted Palestinians.
Allan's release comes amid a wave of violence in the West Bank and Israel which has left nine Israelis, 68 Palestinians and an Arab Israeli dead since the start of October.
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