Akhtar has now returned to his home in the eastern city of Lahore, at least 1000km from Islamabad..
The Pakistani interior ministry said that Akhtar will have to report to a local police station every 14 days.
Bhutto had named Akhtar as a suspect in the Karachi bombing in a book she had finished writing before her death.
Akhtar was arrested in February in connection with the deadly double suicide attack.
Though Bhutto survived the attack, at least 150 others died.
Akhtar was the one-time head of Harkat Jihad-e-Islami, a group supporting Afghanistan's Taliban movement.
He spent most of his time before 2004 living in Afghanistan and during that period he met Osama bin Laden, the al-Qaeda chief, several times, security officials said.