After seven years in prison, an Egyptian with ties to Osama bin Laden has been released from a Canadian prison and is back living with his family.

Mohamed Zeki Mahjoub, who once ran a farming operation in Sudan for the infamous al Qaeda leader, had been held in a Kingston federal prison under Canada's controversial security law.

He has now moved to Toronto where he will live with his family -- including his two children ages seven and nine -- under strict regulations akin to house arrest, The Globe and Mail reports.

"I just couldn't believe it was him. I just ran to hug him ... I feel like here he is, and I'm happy to have him, and that's good enough for now," his wife, Mona El Fouli, told The Globe Thursday night outside the apartment where Mahjoub is now living.

She said the priority now is to be together, and "we'll worry about everything else later."

Fouli was referring to the conditions of his release, which include the fact Mahjoub, 47, will be tracked by the Canadian Border Services Agency with a GPS ankle bracelet as well as video cameras and phone taps at his home.

And when Mahjoub is allowed to leave the house several times each week, he will be followed by CBSA agents who will track his movements.

Fouli said the stress of the new restrictions didn't compare to the joy of having her husband back.

Reporters weren't allowed into the home, and Mahjoub couldn't come out, but he was visible through the open doorway sitting in the living room of the apartment, The Globe reports.

He reportedly wore an off-white Islamic tunic and his beard came down to his stomach.

Public Safety Minister Stockwell Day, meanwhile, maintained that Mahjoub has direct links to terrorism and shouldn't have been released by the courts.

"I would prefer that the people would stay in detention," Day said Thursday.

"The [Federal] Court agrees that Mr. Mahjoub worked closely with and was paid by Osama bin Laden."

However, the same court decided to grant Mahjoub bail -- a decision the government must abide by.

"We will respect the court ruling and hope that the [house-arrest] safeguards will be enough to keep Canadians safe," Day was quoted by The Globe as saying.

Mahjoub's release coincided with the announcement of bail terms for Mahmoud Jaballah, who has also spent years in Canadian custody for suspected links to terrorism.

The two men -- who have spent years fighting attempts to deport them -- are among five alleged immigrant Islamists considered to be threats to Canadian security and held on the security certificates.

None of them have ever been charged with a crime and face only Immigration Act charges, which could result in deportation.

Mahjoub was granted refugee status to Canada in 1996. Before that he ran a Sudanese farming operation for bin Laden.

Mahjoub has never been accused of participating in a terrorist act, and has always maintained his ties with bin Laden were innocuous, and a dispute over money eventually ended their relationship.

CSIS, however, claims he was a member of the Egyptian terror group the Vanguards of Conquest, and knew other important extremists.