However, staff from Rawalpindi's Adiala Jail continued to be deployed at the farmhouse in Chak Shehzad.
APML leaders and supporters gathered outside the farmhouse and distributed sweets. A large media contingent too was present.
Ahmed Raza Kasuri, a senior member of Musharraf's legal team, said his release was not part of any deal.
Besides the Lal Masjid case, Musharraf has been granted bail in three other cases registered against him over the assassination of former premier Benazir Bhutto in 2007, the killing of Baloch leader Akbar Bugti in a 2006 military operation and the imposition of emergency in 2007.
The cases were filed after he returned to Pakistan from self-exile in March to revive his political career.
However, a court barred him from contesting polls for life.
