The reporter was arrested last Thursday after being accused of abusing the Sudanese government in his broadcasts and producing "false stories".
The Aljazeera correspondent was also accused of having illegal broadcasting equipment in the satellite channel's Khartoum bureau.
The equipment was later proved to be legal when the reporter's lawyer presented Sudanese officials with evidence that the equipment had been brought into the country with the correct paperwork.
Prior to his detention, Salih had received threats from the security forces over Aljazeera's political coverage of Sudan.
Abd al-Salam al-Jizuli, Islam Salih's lawyer accused Khartoum of intefering with press freedom in the country.
"Closing the Aljazeera office in Sudan comes in the context of a campaign to crack down on freedom of journalism", he said.
In the dark
The father, brother and wife of Islam Salih had earlier asked for visiting permission, but their request was denied after the authorities demanded a written request.
Aljazeera's spokesperson Jihad Ballout said the network welcomed Salih's release.
"Closing Aljazeera office in Sudan comes in the context of a campaign to crack down on freedom of journalism"
Abd al-Salam al-Jizuli
"We hope that this first step is an indication that our office in Khartoum will soon be up and running again," he said.
The Arab Human Rights Committee has condemned Salih's arrest,and condemmed his treatment in a statement calling for "an end to all aggressive measures against journalists and reporters, and particularly against Aljazeera Satellite Channel."
Widely watched in the Arab world, Aljazeera has upset many conservative Arab governments with its reporting.
Human rights organisations have often condemned Sudan for cracking down on freedom of expression.
In its 2003 report on Sudan, Amnesty International said security forces continued to limit media freedoms.
Amnesty added that authorities unlawfully arrested journalists and editors and fined or suspended newspapers. Sanctions were also imposed for publishing articles critical of the government.
Last month, the daily, al-Ayam, was forced to suspend publication after it was accused of harming Sudanese national interests and helping its enemies.