Indian doctor Mohammed Haneef, who has been cleared of charges of supporting a terrorist organisation, has been conditionally freed from custody, requiring him to report to the Immigration Department by phone everyday and in person every week.

Immigration Minister Kevin Andrews said he has made a residential determination, meaning that rather than being detained in immigration custody, Haneef will be released into residential detention.

Earlire in the day prosecutors withdrew the case against the 27-year-old Haneef, arrested on July 2 and later charged with "recklessly" supporting a terrorist group, at a Brisbane Magistrates' court hearing following a review.

Andrews said while he had not reinstated Haneef's visa, the Gold Coast-based doctor would not be moved to a detention centre.

The immigration minister said he is seeking advice on whether to reverse his decision to revoke Haeef's visa, but in the meantime he is free to live at home.

"That means that he has to reside at an agreed place, it means he's free to actually move about in the community," he said.

Under the conditions of his release, Haneef would be required to report to Immigration Department by telephone either every day or every few days, and once a week report in person, Andrews said.

Haneef would be free to move about in the community.

"Residential detention means the place in which he is residing is that unit. That means that he has to reside at an agreed place, he's free to actually move about in the community, but as a matter of legal principle he is still formally in detention," Andrews said. 

Andrews said he would seek further advice from the Commonwealth solicitor general about whether he would need to reverse his decision to cancel Haneef's visa.

"My duty is to uphold the immigration legislation. I will continue to regard this with the utmost seriousness," he said.

"This does go to the whole question of national interest and national security," he said.

"The decision I've made can be looked at by the solicitor general," he added. Andrews said the police investigation would continue.

"The DPP made a decision today, the charge was withdrawn. As a matter of prudence, as a matter of caution, I am seeking that advice," he said.

"The police investigation, according to Commissioner Mick Keelty, is ongoing. My decision was based on a different legislation I have to uphold, a different level of proof," Andews said.

Whether Haneef proceeded with his appeal on the revocation of his visa was "a matter for his lawyers," Andrews said.

Andrews said it was too early to consider compensation for Haneef as police investigations were continuing.

"That's not an issue that in my view arises. It certainly doesn't arise at this stage, because of two things," he said.

A spokeswoman from the Gold Coast Hospital said Haneef is still an employee of Queensland Health, but remains suspended without pay because of his visa status.