The 17-year-old served an eight-month prison term for slapping and kicking Israeli soldiers.
Ahed Tamimi was arrested on December 19, days after she was recorded along with her cousin Nour Tamimi in the yard of their home in Nabi Saleh, near Ramallah, telling two soldiers to leave, then shoving, kicking and slapping them.
Israeli prisons spokesman Assaf Librati said Tamimi, 17, and her mother Nariman who was also jailed over the incident, had been released and were being taken to the West Bank on Sunday.
For Palestinians, she became a symbol of resistance to Israeli occupation, but many Israelis see her as a publicity-seeking trouble-maker.
She also visited the home of a family member who was shot dead in June clashes after he threw a rock at Israeli soldiers.
Her supporters see a fearless girl who struck two armed soldiers in frustration after learning that Israeli troops had seriously wounded a 15-year-old cousin, shooting him in the head from close range with a rubber bullet during nearby stone-throwing clashes. She is due to be released on Sunday. She was also passionately defended in the Australian Parliament.
Much of the worldwide community considers Tamimi's grounds for arrest a grossly unfair case. She was arrested shortly after and accepted an eight-month plea bargain in May.
He said the same thing would happen to a young person who attacked a policeman or a soldier in Melbourne or Sydney.
Her family's home has been decorated with Palestinian flags and hundreds of chairs await well-wishers.
"The Palestinian prisoners are in a high spirit and I carry a message from them that I will reveal this evening", al-Tamimi said.
Bassem Tamimi said that his daughter completed her high school exams in prison with the help of other prisoners who taught the required material. "I salute everyone who supported me and my case".
When she was only a child, a photograph of her standing up to Israeli soldiers earned Tamimi an invitation to meet then-Turkish Prime Minister Recep Tayyip Erdogan.
This week an Italian artist daubed a 14-foot image of her face and curly reddish hair on the Israeli separation wall in the occupied West Bank. She says she is to deliver the message of female inmates in Israeli jails to Palestinians.
"Ahed Tamimi has been released, but only after serving an unjust sentence based on the ridiculous premise that she posed a threat to armed and heavily protected soldiers", Saleh Higazi, Amnesty International's head of office in Jerusalem, said in a statement.
According to Palestinian figures, roughly 6,500 Palestinians - including an estimated 350 minors - are now languishing in Israeli prisons.
Most countries consider Israeli settlements in the West Bank to be illegal, but this is disputed by Israel.