The young man's lawyer described his arrest as a “scandal” in an interview with Spiegel.
Federal prosecutors also confirmed that the judge did not consider the evidence presented as sufficient “for an urgent suspicion of criminality.”
Police investigators told DPA that no explosives were found during a search of his apartment.
He had been arrested on Wednesday evening in the Schöneberg district of Berlin on suspicion of plotting an act of terrorism for Isis.
Investigators had described him to Focus Online as "highly dangerous" and “a second Jaber Albakr.”
Albakr was allegedly plotting a terror attack on a Berlin airport before police in Saxony raided his house. After a two-day manhunt he was caught. He then apparently hung himself in his jail cell.
Germany has so far been spared large-scale jihadist attacks.
But it was shaken by two assaults claimed by IS and carried out by asylum seekers - an axe rampage on a train in Würzburg that injured five, and a suicide bombing in Ansbach in which 15 people were hurt.