There was high drama at the Kasna police station in Greater Noida where Gandhi and other Congress leaders, who were held with him, were taken after the arrest at around 11.00 p.m.
Gandhi was asked to sign a bond after which police said he would be permitted to leave.
He, however, flatly refused to do so saying he had gone to the village with a purpose and would return there if he was released, Congress sources said.
The police later released Gandhi on its own volition at around 2.00 a.m. Thursday and he was driven back to New Delhi, Uttar Pradesh Congress Chief Rita Bahuguna Joshi told reporters.
Gandhi was picked up from the sit-in site along with Rita Bahuguna Joshi, Congress general secretary Digvijay Singh and MP Raj Babbar, Gautam Budh Nagar acting district magistrate Sheetal Verma said.
"Rahul Gandhi has been arrested for violating the prohibitory orders enforced under section 144 of Cr.P.C (Criminal Procedure Code). State president Rita Bahuguna Joshi, Digvijay Singh and Raj Babbar were also arrested along with Rahul Gandhi," she said earlier.
The district administration, prior to the arrests, imposed section 144 of the Cr.P.C.
According to state Cabinet Secretary Shashank Shekhar Singh, Gandhi and the other leaders were taken to a police station where they were required to sign a bond in front of an executive magistrate before being permitted to leave.
Singh said the Gautam Budh Nagar district administration received a letter from the Congress at 8.30 p.m. saying it planned to hold a meeting in Bhatta Parsaul Thursday.
Singh said Gandhi was held apprehending a law and order situation due to the the proposed meeting.
Ritu Bahuguna Joshi said the Congress leaders were arrested in the dark of the night.
"It was a peaceful demonstration. There were not even mikes there. It is a defeated government and the Congress is the only party fighting for the farmers," she said.
On Saturday, police and agitating farmers fought a pitched battle in Bhatta Parsaul that left four dead, including two policemen.
Gandhi was in the village Wednesday supporting farmers who are agitating for higher compensation for land acquired for the 156-km Yamuna Expressway, linking New Delhi with Agra.
The Congress scion sneaked into the village, which was barred to politicians and outsiders, early Wednesday on a motor-bike despite heavy police presence. He spent nearly 18 hours with the villagers before his arrest.
Addressing the agitating farmers earlier in the day, Gandhi said the Uttar Pradesh government's high-handedness made him "feel ashamed to be an Indian".
"I have seen the violence unleashed on your youth and women. By seeing what has happened here, I feel ashamed to be an Indian. The state government is tormenting its own people," Gandhi said, targeting Mayawati's Bahujan Samaj Party (BSP) government.
However, the chief minister responded by questioning Gandhi's credentials.
"Rahul is no grassroots-level leader and has no right to represent the farmers," she said in Lucknow.
