An AFP journalist saw the 25-year-old enter the Palestinian territory in a Red Cross ambulance to be greeted by hundreds of people, including relatives, who waved Palestinian flags and pictures of other prisoners.
Tens of them surrounded the ambulance chanting "Victory, victory!" and "Freedom for the prisoners!"
Sarsak was taken immediately to Gaza City's Shifa hospital, where he is expected to undergo medical tests before returning to his home in Rafah in the southern Gaza Strip, for a celebration in his honour.
Sarsak went on hunger strike for nearly three months in protest against his detention without charge under Israel's "unlawful combatants" law. His detention order was due to expire or be renewed on August 22.
But on June 18, his lawyer announced that he had reached an agreement with Israel's prison services to end his hunger strike in exchange for his release on July 10.
Sarsak was arrested in July 2009 as he was on his way from Gaza to sign on with a West Bank football team.
His protest attracted international attention, with world football governing body FIFA and rights group Amnesty International expressing concern over his ongoing detention.
Israeli officials called Sarsak an "Islamic Jihad terrorist who planned attacks and bombings," but never made public any charges or evidence against him.
He began his hunger strike on March 23, but briefly paused it in mid-April.
He received vitamins, sugar and milk for much of the protest, but doctors who visited him expressed concern about his health.
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