Mohamed Hersi, 25, was arrested at Pearson International Airport last month. Police allege Hersi was attempting to travel to Somalia to join Al-Shabaab, a group identified in Canada as a terrorist organization.
Al-Shabaab, a militant group trying to overthrow Somalia's transitional government, has been linked to al Qaeda.
Outside the courtroom on Friday, lawyer Anser Farooq said he was very pleased Hersi had been released.
"It's hard waiting in custody when you feel you should be out, it takes a while…you have to be patient and he was quite patient," he said.
Very little information about Hersi has been released by police, other than that he is a Canadian citizen who left his job to make the journey.
As part of the bail conditions, his passport has been seized and he must not be in possession of mobile phone or have access to the Internet.
Police suspect several young Canadians have gone to Somalia to join the al-Shabaab in recent years.
With files from The Canadian Press