On Thursday an appeals court tore up last week's decision by Gothenburg District Court to remand the 32-year-old Swedish citizen in custody on suspicion of terrorist crimes in war-torn Syria in the spring of 2013.
According to the appeals court the health condition of the man, who is in a wheelchair and struggles to speak, prevents him from obstructing the ongoing investigation.
He was however forced to hand over his passport and was told he was not allowed to leave Gothenburg pending the probe.
The man's lawyer, Lars Salkola, welcomed the decision.
“It was the natural decision by the Court of Appeal, which shares the defence's assessment that there are no special reasons for keeping him under arrest because he can neither escape nor impede the investigation,” he told The Local.
However, prosecutor Ronnie Jacobsson criticized it.
“I'm a bit surprised considering the seriousness of the crime he is suspected of, and for which he risks a very lengthy sentence if he is found guilty,” he told the TT newswire.
Sweden's security service Säpo, West Sweden's regional police force and the country's National Task Force (Nationella Insatsstyrkan) took part in an operation to arrest the 32-year-old along with a 30-year-old man, also suspected of committing terrorist crimes in Syria, on Thursday last week.
They both deny the accusations.
An arrest warrant was also issued for a 26-year-old man who is still at large. He is suspected of assisting in committing the alleged offences.
This is the first time in Sweden that people have been arrested in an investigation into terrorist crimes during the four-year war in Syria, which has claimed more than 215,000 lives.
At least 150 Swedish residents are known to have gone to Syria or Iraq to fight for Isis or other extremist groups, according to Säpo, with intelligence suggesting that at least 35 have been killed.
Sweden's government is considering drafting new legislation that would ban its nationals from fighting in armed conflicts for terrorist organizations such as Isis.
“We will put forward proposals in parliament in autumn with suggestions for criminalizing the acts of organizing, recruiting and financing terror trips. Participating at training camps for terrorism, for example, is not punishable today,” Interior Minister Anders Ygeman told TT last week.
Additional research and interview by Elin Jönsson.