Captive Israeli soldier Gilad Shalit was on Tuesday freed from five years of Hamas captivity and entered Egypt in a move set to prompt the release of 477 Palestinian prisoners.
"He was transferred to Egypt by Hamas 10 minutes ago, and an Israeli colonel will check his state of health," he told AFP. "Afterwards, he will be transferred to Israel at around 9.00 am (0700 GMT)."
News of his release to Egypt came after hours of swirling rumours and speculation over his movements, with a flurry of claims denied by Israeli officials and Hamas leaders in Gaza.
His transfer to Egyptian custody was expected to spark the release of hundreds of Palestinian prisoners in a long-awaited deal signed last week between Israel and its sworn enemy Hamas under which the Jewish state will free a total of 1,027 prisoners to secure the release of the now 25-year-old soldier.
Shalit has been held by militants in Gaza for more than five years and the deal marks the highest price ever paid for the release of one person.
And if all goes to plan, it will be the first time in 26 years that a captured soldier has been returned to the Jewish state alive.
Tuesday's complex operation, which began before dawn, will see Israel releasing 477 prisoners, including hundreds who were serving life sentences for deadly attacks.
Earlier an Israeli military spokeswoman confirmed that all the prisoners destined for Gaza and those to be deported overseas had reached the Kerem Shalom crossing at the southernmost point of the Israel-Gaza border.
"The third (and final) convoy of prisoners has arrived, everything is going to plan," army spokeswoman Avital Leibovich told AFP, denying there was any delay. She had earlier said the prisoners would enter Gaza around 6:30am (0430 GMT).
An AFP correspondent in Kerem Shalom saw the final two coachloads of prisoners had entered the crossing, escorted by two prison service vans.
With all the prisoners in place for the exchange, Israel was waiting for confirmation from either a Red Cross representative or an Egyptian official in Gaza that they had seen Shalit and that he was alive and well.
After receiving confirmation, Israel was to order the release of 27 women prisoners.
Some 297 prisoners are to be released into Gaza, leaving Israel through Kerem Shalom, then being driven along the border to the Egyptian side of the Rafah crossing where they would be greeted by top Hamas figures from the Damascus-based leadership, including exiled chief Khaled Meshaal.
"We are on the way to Rafah with Mussa Abu Marzuk and Sheikh Salah al-Aruri to welcome the liberated prisoners," spokesman Izzat al-Rishq told Hamas's Al Aqsa television in Gaza, referring to Meshaal's deputy and another senior Hamas official.
"The operation to return Shalit to the Israeli side will take place at the moment we are assured that all the prisoners have arrived at the Egyptian border."
Another 40 prisoners who are to be deported overseas will remain in Egypt before being sent to host countries, which include Turkey, Syria and Qatar.
Emotions were running high across Israel, where Shalit, held for over five years, has enormous symbolic importance.
And Palestinian across the West Bank and Gaza were also preparing to give a heroes' welcome to the returning prisoners.
Shalit was a 19-year-old corporal on duty along the Gaza border when he was captured on June 25 2006 by militants from three Gaza-based groups, including Hamas.
Three days after he was snatched, Israel launched a massive military operation against Gaza in a bid to secure his release,
which lasted five months and left more than 400 Palestinians dead.
After entering Israel, Shalit will be flown to Tel Nof airbase in southern Israel where he will meet with his family and meet Israeli leaders.
Shalit's family, his parents Noam and Aviva, his brother Yoel and sister Hadass, left their home in Mitzpe Hila in northern Israel shortly after dawn and were flown by helicopter to Tel Nof airbase near Tel Aviv where they will be reunited with the now 25-year-old soldier, an AFP correspondent said.