Roberto Vila, 34, who works for the media department of the Spanish aid group Co-operation Assembly for Peace, was snatched earlier in the day by four armed men from a car near the town of Deir Al-Balah in central Gaza and bundled into a yellow car.
Vila will be escorted out of the Gaza Strip by agents of the Palestinian preventative security services after being freed, the sources said without elaborating.
The same sources said they were aware of the identities of the kidnappers, but would not say any more.
Vila's seizure was the latest in a string of abductions targeting foreigners in the increasingly lawless Palestinian territory.
The gunmen who kidnapped him released Vila's French female colleague and two Palestinian assistants who had also been in the car with him.
No claim of responsibility for the abduction was made.
Palestinian prime minister Ismail Haniya, called the abduction immoral and demanded that the aid worker be released.
"We reject this kidnapping. It is immoral," he told reporters in Gaza City. "I ask the people who kidnapped him to release him immediately. This is bad for Palestinian people."
The Al-Aqsa Brigades, a militant group close to president Mahmud Abbas's Fatah party, also condemned the abduction.
"We strongly condemn the kidnapping and we're going to make all efforts to release him," a spokesman told AFP.
The kidnapping came a week after another Spaniard, a photographer for the US-based Associated Press news agency, was held by Gaza gunmen for around 15 hours before being released unharmed.
Emilio Morenatti, 37, was seized by four masked and armed men as he left his residence in central of Gaza City early on October 24. He was released late on Tuesday, with no one claiming responsibility for the abduction.
Kidnappings of foreigners have increased in the impoverished Palestinian territory, which has been seized by an unprecedented financial and political crisis for months.
Most of the victims have been released unharmed within days.
In August, two journalists for the US Fox News television network spent 13 days in captivity of a previously unknown militant group, Holy Jihad Brigades, who demanded the release of all Muslim prisoners held in US jails.
It was the first time kidnappers had made a demand on a foreign government, as Palestinian abductors usually seize foreigners to obtain concessions from the Palestinian Authority.
The two Fox journalists, US reporter Steve Centanni and New Zealand freelance cameraman Olaf Wiig, were freed after being forced to convert to Islam at gunpoint, with a videotape of their conversion issued just hours before they were released.
The territories have been gripped by an unprecedented political and financial crisis that followed the rise to power of the Hamas movement in January's election, the subsequent Western aid cut-off and internecine Palestinian violence.
Kidnappings have been particularly prevalent in the Gaza Strip, where armed groups and clans have proliferated following Israel's withdrawal from the territory last year after a 38-year occupation.
The chaos has been fed by a massive presence of arms in Gaza, inter-factional fighting between Hamas and Fatah and a four-month Israeli offensive.

Copyright AFP (Agence France-Presse), 2006