He had been sentenced to a minimum six years for the manslaughter of Mr Nassour, who is the brother of Fat Pizza comedian George Nassour.
During Ibrahim's parole hearing, he told the board he wanted to move on with his life, wouldn't break the law if released from jail and would abide by the "most stringent" parole conditions.
Being behind bars while his mother was treated for cancer was a "wake up call", he told the parole board.
The 36-year-old was granted parole, reportedly subject to a range of strict conditions, including electronic monitoring and keeping away from Kings Cross and other parts of Sydney.
Michael Ibrahim was acquitted in 2012 of conspiring to murder nightclub owner John Macris, who he believed was responsible for gunning down his brother, Fadi Ibrahim, outside a home in Sydney's north.
Ibrahim was taken to Sydney Hospital after Sunday night's incident but was then transferred to St Vincent's Hospital where he is in a stable condition.