Alaa Abdel-Fattah was accused of inciting violence and other offences during clashes that killed 27 people on 9 October, but he was never formally charged. He was arrested on 30 October.
His first stop after he was freed was Cairo’s Tahrir Square, the epicentre of the uprising that toppled Hosni Mubarak.
The arrest raised tensions between the activists who engineered Mr Mubarak’s downfall and the generals led by Hussein Tantawi, the deposed leader’s defence minister for 20 years.
Relations have since steadily worsened, hitting a new low this month, when soldiers beat and stamped on protesters in clashes in Cairo that left at least 18 people dead and dozens injured.
“We need to end military rule,” Mr Abdel-Fattah said, moments after his release outside Cairo’s police headquarters.
“We cannot just celebrate my innocence. We know from the beginning I am not the one who killed people. We have not gone after the real criminals who killed people.”
The decision to release Mr Abdel-Fattah but ban him from travel also applies to 27 others accused of taking part in violent clashes with security forces.
That violence began when groups of stone-throwers attacked a crowd of Coptic Christians protesting an attack on a church in southern Egypt.
Mr Abdel-Fattah and his supporters dismissed the accusations that he incited violence, saying the military was trying to silence a prominent critic.