The brother of Islamic State terrorist Mohammed Elomar has been released from jail after the NSW Government lost its bid to keep the prisoner, who it deems a threat to the community, behind bars.

Ahmed Elomar, 33, walked from Goulburn prison today after serving close to three years for bashing a police officer with a wooden pole during violent protests in Sydney's Hyde Park in 2012.

He was granted parole in May after the state parole board was concerned he could become radicalised in jail.

The New South Wales Government appealed the decision to the Supreme Court two weeks ago on the grounds the parole authority had ignored Elomar's existing extreme views and was a risk to public safety.

Ahmed Elomar was segregated on five occasions while in prison: November 9 to 22, 2012: Found in possession of a mobile phone

Found in possession of a mobile phone March 23 to April 10, 2013: Participated in inciting a disturbance

Participated in inciting a disturbance August 8 to 21, 2013: Made serious threats to the life of an officer

Made serious threats to the life of an officer May 26 to to June 8, 2014: Fought with other inmates, chemicals were used by guards to gain control

Fought with other inmates, chemicals were used by guards to gain control February 20 to March 15, 2015: Involved in an incident that seriously compromised security and intimidated a staff member

The case has exposed deep divisions between the state parole authority, corrective services and the NSW Government.

In June this year, the head of Corrective Services Peter Severin urged the parole board not to release Elomar until he completed a new de-radicalisation program.

Supreme Court Justice Geoff Bellew rejected the Government claim that Elomar had already been radicalised, finding that it was based upon a false premise.

The court found no assessment had ever been undertaken to determine whether the prisoner had been at risk of radicalisation or had already been radicalised.

Justice Bellew dismissed the Government's case entirely and ordered it to pay Elomar's court costs.

Elomar's barrister, Evan James, said it was a pleasing result.

"My client is looking forward to being released, being reintegrated back into the community free from any negative influences," he said.

"The family would appreciate some privacy at this time, but that's the extent of the comment at this stage."

Offender remains untreated, threat to community: Minister

Corrections Minister David Elliott said he was "bitterly disappointed by today's Supreme Court decision".

Speaking outside Parliament House, Mr Elliott said he was limited about what he could say about the ruling because of the separation of powers.

Ahmed Elomar is a former professional boxer. ( AAP: Mick Tsikas, file photo )

"My strong view is that prisoner Elomar would have been better served remaining in jail to complete de-radicalisation program," the Minister said.

Mr Elliott said earlier in a statement he thought Elomar remained "untreated and continues to threaten the safety of the community", but speaking outside Parliament he said he did not believe the community should feel unsafe.

"My message to inmate Elomar is that his parole for the next 18 months will be tough. He will be surveyed electronically. He should assume that every email he sends, every text he sends and every conversation he has may be monitored.

"If he so much as kicks a cat he will be in breach of his parole.

"As far as the people of New South Wales are concerned, people like Elomar who beat cops and are convicted for it should serve time in jail."

Sorry, this video has expired Ahmed Elomar (in white) is filmed at the Sydney protests in 2012

During submissions to the parole board to keep Elomar behind bars, Mr Severin said the prisoner was part of a group of inmates who administered Sharia law in a part of Goulburn jail dubbed the Middle Eastern courtyard.

He also suggested Elomar viewed his terrorist brother Mohammed Elomar, who died in Syria fighting for IS last year, to be a "martyr".

The June hearing also heard Elomar was part of a group of inmates who spoke of beheading someone in September 2015.

But the parole authority found it was appropriate to release Elmoar "in the public interest" because he had been confined in the presence of radicalised inmates that may influence him.