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He is the second terrorist to be released in the past two days.
Sayeed was delivered to his home in Lahore before dawn after five months in custody.
A dozen policemen surrounded Sayeed's home, barring the entry of supporters and journalists who had converged there.
"I am still under government detention. My house has been declared a sub-jail," Sayeed was quoted as saying.
"There is a mosque just two minutes away. I was not even allowed to go and offer prayers there."
As part of his crackdown on terrorist groups, President Pervez Musharraf had banned the Lashkar and four other groups in January.
Sayeed was arrested in May shortly after the massacre of 33 people in Jammu and Kashmir.
He was taken into custody under The Maintenance of Public Order, which allows for suspects to be detained on suspicion of planning to create unrest.
Agencies
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