"Salah has been released from prison and is on his way home," Omar Khamaysi told Anadolu Agency.
Waving green banners, scores of Palestinians stood outside Megiddo prison in northern Israel to welcome Salah.
The Higher Follow-Up Committee for Arab Citizens of Israel, the highest representative body of Arab residents of Israel, is also planning to organize a reception ceremony for Salah in his hometown Umm al-Fahm.
"Sheikh Salah was unfairly imprisoned and paid the price of preserving the principles of our people and defending the blessed Al-Aqsa Mosque," the committee said in a statement on Sunday.
Salah, the leader of the northern branch of Islamic Movement in Israel, was detained in August 2017 and indicted for alleged incitement over his criticism of the erection of metal detectors at Jerusalem's flashpoint Al-Aqsa Mosque compound.
He was sentenced to 28 months in prison by an Israeli court. He served 11 months in jail, half of which was in solitary confinement before he was moved to house arrest.
After two years under house arrest, in August 2020, Salah began a 17-month jail term on incitement charges.
A staunch defender of the Palestinian rights, Salah has staged a number of protests against Israeli policies and campaigned against the expansion of Israeli settlements in the occupied territories.
Since 2015, Israel has prohibited Salah from traveling outside the country for reasons ostensibly related to "national security".
The Islamic Movement in Israel, which Salah founded in 1971, has been outlawed by the Israeli authorities since 2015. In recent years, the same authorities have repeatedly arrested Salah and shut down dozens of organizations, including a number of charities, over their alleged links to his group.
READ: Israeli forces raid house, arrest senior Hamas leader in West Bank