The decision to release Ahmed Elomar, the brother and nephew of two infamous Australian terrorists, from prison has been challenged by the NSW government.

Elomar, who has served almost three years in prison for bashing a police officer with a flag pole during protests in Sydney's Hyde Park, was granted parole by the State Parole Authority last Friday.

Ahmed Elomar, pictured here aged 22. Credit:Brendan Esposito

The 33-year-old, who is the brother of slain Islamic State fighter Mohamed Elomar and nephew of Pendennis terror plot mastermind Mohamed Ali Elomar, was given a maximum four years and eight month sentence in June 2014.

Corrections Minister David Elliott has lodged an appeal against Elomar's release on parole in the NSW Supreme Court, saying he is confident his case is strong.