A former US Marine turned radical Islamic preacher who had been locked up in a Florida prison for years on terrorism-related charges has been set free by a federal judge who said there were insufficient grounds to keep him behind bars.

Marcus Dwayne Robertson—who was deemed so dangerous that he was shackled and had his own guard in a Florida prison—was a US Marine trained in special operations who later became a leader of an infamous and murderous New York gang named "Ali Baba and the 40 Thieves."

He then transformed himself into a radical imam in Florida who influenced young men and sent them overseas to fight for terrorist groups, Fox News reported.

He was kept at John E. Polk Correctional Facility in Seminole County on gun and tax fraud convictions.

However, prosecutors who tried to add another decade to his sentence on enhanced terrorism charges under the Foreign Intelligence Surveillance Act failed to convince US District Judge Gregory Presnell, who freed Robertson on Friday with time served.

"By all accounts, Marcus Dwayne Robertson was a very bad man, one of the leaders of a criminal gang that committed violent armed robberies in the early 1990s. ... Robertson personally participated in more than a dozen armed robberies, and shot and killed several men," wrote Presnell in his sentencing statement.

"Notwithstanding the vast investigative resources of the United States, and years of effort, the prosecution's proof is woefully inadequate," he said.

The judge said prosecutors only took pieces of information from different courses out of context to make their case that Robertson is a terrorist.

"The Court finds that the prosecution has not even come close to proving by a preponderance of the evidence that Robertson's relatively minor income tax fraud was intended to promote a federal crime of terrorism," Presnell said.

The judge said the prosecution failed to show that Robertson had extremist beliefs and that he accessed documents penned by Islamic extremists in his computer.

Prosecutors, who argued that Robertson "is still an extremist, just as he was in the early 1990s" during sentencing proceedings, did not comment on the decision but will likely appeal the sentence or may aim to add charges against Robertson.

"The only differences are that the defendant is now focused on training others to commit violent acts as opposed to committing them himself, and the violent acts are to occur overseas instead of inside the United States," prosecutors stated in recent court filings.

Many of the court's filings can only be accessed by prosecutors, defence lawyers, and the judge "due to concerns about disclosure of classified information" as part of Robertson's defence is about his undercover work for the FBI which involved documenting terrorist plots and networks in Africa, Egypt and the US.

Robertson denied being involved in terrorist activities in court. His attorney, Daniel Brodersen, said his client was "obviously delighted the judge saw that the government did not have significant proof to show he had any conduct related to terrorism."

The government was "overzealous in the case," Brodersen said, "because of the times we are in."

"They pursued a case of terrorism when it did not exist," he said.