Singh was behind the bars under different charges of serious nature of crime including extortion, kidnapping and murder.
The SP legislator was lodged in Faizabad jail since October, 2010 after a case of extortion was lodged against him by local businessman Vikas Singh, a close aide of the then BSP MLA Jitendra Singh Bablu, in Maharajganj police station.
Police had recommended charging Singh with the Gangster Act, which was confirmed by the then district magistrate M P Agrawal.
"On the state government's instruction, the prosecution side had submitted a no-objection report also containing no- objection certificate from the district magistrate and the SSP to the law department," public prosecutor Rajiv Kumar Shrivastava said.
"The Law department on behalf of the state government issued instructions that reached here on Friday, containing direction to withdraw the gangster case lodged against Abhay Singh," he said.
Shrivastava said Singh has already got bail from the different courts in two other cases of Gangster Act registered at Raunahi police station and Kotwali city police station.
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Special judge Faridul Haq issued the release orders after police sub-inspector Sanjay Nagvanshi recorded his statement in the court for dropping the case.
Nagvanshi, who was then posted in Maharajganj police station and the official who registered case against Singh.
Singh had won the recently held assembly election from Gosaiganj assembly constituency by defeating his BSP rival Indra Pratap Tiwari.