The Police media unit said the suspect was released on three sureties of Rs 500,000 and cash bail of Rs 25,000 by the Gampaha Chief Magistrate.
Police said Udalagama will continue to be incarcerated as he is charged with being one of the assailants of former Sunday Leader Editor Lasantha Wickrematunge.
On 23 January 2009, Tennakoon and his wife were assaulted at Imbulgoda in Gampaha, after which the couple fled into exile for their safety.
Wickrematunge was killed prior to that on 8 January 2009.
The suspect, a former member of the Army Intelligence Division, was taken into custody on 15 July night by the CID. The CID later told Court that they strongly suspected that Udalagama could also be linked to the attack on the former Editor of Rivira newspaper.