Magistrate Vakayi Chikwekwe told a packed courtroom that the decision to bring new charges in court against Evan Mawarire was unconstitutional.
Mawarire was charged with inciting violence when he was arrested on Wednesday, but prosecutors shortly before his court appearance today changed it to more serious charges of attempting to overthrow a constitutionally elected government.
Mawarire's lawyer protested that the last-minute change was unconstitutional, and the magistrate agreed.
Hundreds of singing supporters greeted the release of Mawarire, who has rallied Zimbabweans with a with a social media campaign called #ThisFlag, encouraging them to reclaim their flag by urging President Robert Mugabe's Government to properly manage the country's battered economy.
Supporters, standing in the dark, held up candles and mobile phones to light him.
Dozens of supporters in the courtroom's public gallery had laughed in derision when the prosecutor announced the new charges, which could have brought Mawarire 20 years in prison.
During the day, hundreds of supporters outside the Harare Magistrates Court, many wearing the Zimbabwe flag, sang in defiance. Activists chanted slogans and prayed.
Riot police and water cannons and riot police surrounded the court.
Many people last week answered Mawarire's call on social media for a job boycott to protest dismal economic conditions.
It was the largest such boycott in Zimbabwe in nearly a decade.
Another boycott had been called for today, but the response appeared muted. The Government has warned organizers of further protests that "they will face the full wrath of the law."
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