Tahmid Hasib Khan is shown in this undated family handout photo. THE CANADIAN PRESS/HO *MANDATORY CREDIT*

TORONTO - The family of a Toronto university student who was detained in Bangladesh after surviving a terrorist attack is expressing cautious optimism now that the young man has been released on bail, apparently cleared of involvement in the deadly raid.

Tahmid Hasib Khan, a permanent resident of Canada, was detained after a bloody attack this summer at a restaurant in the Bangladeshi capital, but his family has firmly maintained his innocence.

On Sunday, a Bangladesh court released Khan on bail in Dhaka, the country's capital.

Canadian lawyer Marlys Edwardh, who was hired by his family, said the decision came after police filed documents with the court saying investigators found no evidence against the 22-year-old in connection with the terror attack.

Khan's older brother, who is a Canadian citizen and lives in Toronto, said the bail development was a relief for his family.

"Although this is not over, this is great progress," Talha Khan told The Canadian Press. "My parents are elated, but at the same time they are a little anxious because it's not over 100 per cent."

Tahmid Khan is an undergraduate student studying global health at the University of Toronto and hopes to eventually become a Canadian citizen, his family has said.

He had arrived in Dhaka on July 1 to celebrate Eid with his family, and planned to travel to Nepal to begin an internship with UNICEF the following week.

He was with friends at the Holey Artisan Bakery when five armed gunmen attacked, killing 20 people and holding others inside hostage. Security forces stormed the restaurant on July 2, killing the gunmen and rescuing the remaining hostages.

Ever since surviving the attack, authorities have said little about why Khan was being held.

He was first taken into custody for questioning. His family was initially allowed brief contact with him but then lost touch with him for days until police formally announced his arrest at the beginning of August.

Police were granted permission to interview Khan and his detention was then extended until he was ordered into "judicial custody" and was sent to prison in mid-August.

Now, after three months of detention, Khan is currently with his parents in Dhaka, his brother said, and appears to be doing well.

"Tahmid is in good health, both physically and mentally," his brother said, adding that his family remains grateful for the support they've received from Canada and Canadians.

The young man's case, however, hasn't been entirely resolved.

Edwardh said Khan has been "completely cleared" of any involvement in the terror attack but is now facing a "lack of co-operation" charge.

"The lack of co-operation is relating to his failure to attend for police interviews on July 10 and July 21," Edwardh explained. "The allegations made about lack of co-operation and not showing up for an interview coincide in time when the commissioner of the Bangladeshi police force made a statement on July 16 that Tahmid was being interrogated."

Edwardh said details on the new charge are expected at a Wednesday court hearing for Khan.

A spokeswoman with Global Affairs Canada said Canadian officials were monitoring Khan's situation and have been in touch with his family, his legal counsel and Bangladeshi authorities.

News from © The Canadian Press, 2016