El-Masri had been arrested on suspicion of setting fire to the entrance of the market after having destroyed its glass door, a police statement said.
Smoke and water caused around $680,000 in damage.
Sueddeutsche Zeitung, a German newspaper, quoted el-Masri's lawyer, Manfred Gnjidic, as saying that el-Masri had had an argument with the market about an electronic device he had bought there earlier.
El-Masri was captured by CIA agents while attempting to enter Macedonia on New Year's eve 2003 after being mistakenly identified as an associate of the September 11 hijackers.
He was subsequently flown to a CIA-run prison known as the "salt pit" in Kabul, Afghanistan, where he said he was beaten and sexually abused during five months in captivity.
After his release in May 2004, German prosecutors ordered the arrest of 13 CIA agents who were believed to have participated in his capture.
In March, a US federal appeals court refused to examine a lawsuit brought by el-Masri, ruling that the case could jeopardise national security by disclosing state secrets.
Angela Merkel, the German chancellor, has said that the US had acknowledged making a mistake with el-Masri.