Kula Lumpur also announced it will cancel visa-free entry to Malaysia for DPRK nationals citing security concerns. The DPRK says Kim likely died of a heart attack and wants an independent investigation of the alleged murder weapon.
Malaysia will deport the only North Korean held in connection with the death of Kim Jong-nam, the estranged half-brother of DPRK leader Kim Jong-un.
Kim Jong-nam was murdered on February 13 at Kuala Lumpur International Airport, allegedly by two women using VX nerve agent.
Attorney General Mohamed Apandi Ali said 47-year-old Ri Jong-chol would be released and deported on Friday.
"He is a free man. His remand expires and there is insufficient evidence to charge him," Apandi said.
Malaysia also announced it is cancelling its visa-waiver programme with North Korea.
The moves came a day after two young women appeared in court charged with murdering Kim.
TRT World spoke to Zan Azlee, a Kuala Lumpur-based journalist, for the latest updates.
DPRK disputes cause of death
North Korea on Thursday said there were strong indications that a heart attack may have killed the DPRK national who died at the Kuala Lumpur International airport.
North Korea has denied the dead man is Kim Jong-nam. A former DPRK deputy ambassador to the UN Ri Tong Il said samples of the toxic substance found in the autopsy should be sent to the Organisation for the Prohibition of Chemical Weapons (OPCW) for analysis.
"If it is true that it was used, then the samples should be sent to the office of OPCW," he told reporters, on the alleged use of VX.
Malaysia and North Korea have maintained friendly ties for decades, but the relationship is now strained.
Malaysia Deputy Prime Minister Ahmad Zahid Hamidi said Kuala Lumpur will cancel visa-free entry for DPRK nationals from March 6, citing security concerns.
Malaysia is one of the few countries that North Koreans could visit without a visa, and Malaysians are among the few nationalities granted visa-free entry to the secretive, nuclear-armed state.
A senior Malaysian official said that the government was mulling further "downgrading diplomatic ties."
"Malaysia is considering shutting down its mission in Pyongyang," he said, as well as the expulsion of the North Korean ambassador following his "baseless allegations," in reference to accusations of bias in the murder probe.
Malaysia formally established diplomatic relations with North Korea in 1973, and opened an embassy in Pyongyang in 2003.
Up to 1,000 North Koreans currently work in Malaysia. Like ex-patriates worldwide, their remittances home are a valuable source of foreign currency for the isolated regime.