Timraz was arrested a month ago by the Shin Bet after crossing into Israel for work. Timraz's son Khaled said his father was released after a court decided not to charge him.
Timraz, 61, from the Nuseirat refugee camp in the central Gaza Strip, travelled to Israel from the Gaza Strip many times due to his work.
His wife indicated that communication with him was lost several weeks ago after he reached the Erez Border Crossing. She also added that his son Abed al-Hadi received a telephone call from the Israeli security establishment informing them of his arrest.
Timraz's family had been lobbying international organizations and human rights groups to pressure Israel for his release.
On Wednesday evening, the Israeli Foreign Ministry issued a statement concerning Timraz, saying, "Timraz was detained for questioning by the Shin Bet on suspicion of being involved in committing security offenses. During his questioning, information was received indicating his involvement in prohibited activity.
"Following his questioning, he was released and the findings of the investigation are being reviewed by the relevant officials in order to take action against those involved in the activities. It should be noted that UN authorities received reports from Israel concerning Timraz's arrest and its significance."