Mahmoud al-Sarsak, 25, was detained under Israel's "unlawful combatants" law, and is the latest of a number of Palestinian prisoners to end fasts after winning guarantees of release from their Israeli jailers.
"There has been a written agreement with the Israeli side for him to be released on July 10 and to be moved for medical treatment to a civilian hospital," Sarsak's lawyer Mohammed Jabarin told Reuters.
"There had been a substantial deterioration in his health and he needs special care. He will not return to prison," Jabarin added.
Israel's Prisons Authority had no comment. Israel detained Sarsak on suspicion of having ties with the Islamic Jihad militant group. He was held under a law introduced after it pulled troops out of Gaza in 2005 which permitted Israel to jail "unlawful combatants" without trial.
He denies the allegation, and has never been formally charged. Sarsak, who has played for the Palestinian national team, was detained while he was leaving Gaza, the Palestinian coastal enclave ruled by the Islamist Hamas faction, to travel through Israel to join teammates in the occupied West Bank.
Sarsak began his hunger strike a few months ago to protest his detention, but has intermittently ingested fluids such as milk and a glucose drip, Jabarin and Israeli officials said. Israel struck a deal last month with representatives of 1,600 Palestinian prisoners to end hunger strikes of up to 27 days, agreeing to demands to stop solitary confinements, allow family visits and improve prison conditions.
Israel has also freed three other prisoners in the past few months, ending lengthy hunger strikes on their part. The Palestinian Football Association had raised Sarsak's case with international soccer authorities and appealed to them to prevent Israel from hosting the European under-21 championships next year, but the request was rejected on Monday.
Michel Platini, the president of UEFA, European soccer's governing organisation, said he had asked the Israeli soccer body to raise Sarsak's case with the government but the tournament would go ahead as planned. "I am sure the (head of the Israeli FA) will alert his country's authorities as quickly as possible to the great concern caused..." he said in a letter to Jibril Rajoub, the head of the Palestinian Football Association.
"The Israel FA earned the right to host this tournament... We cannot hold (it) responsible for the political situation in the region or for legal procedures in place in its country."
Israeli and Palestinian teams do not compete against each other as the Israelis play their matches in Europe while the Palestinians are members of Asia's soccer body.