French-Israeli mining tycoon Beny Steinmetz was released on bail in Cyprus on Wednesday, police on the island said, after his arrest on a Romanian warrant over an unserved sentence.

The 67-year-old, who made his fortune in diamonds, had been detained at Larnaca International Airport on August 31 under a Europol arrest warrant issued by Romania, police said at the time.

A Romanian court had sentenced Steinmetz in absentia to five years in jail in 2020 for setting up "an organised criminal group" in a series of land deals between 2006 and 2008 that cost Romania an estimated 135 million euros ($152 million).

Steinmetz was released from police custody in Cyprus on conditional bail before his next court appearance, a police spokesperson said.

The billionaire had appeared before a Larnaca district court as part of his extradition hearing and the case was adjourned until September 14, the spokesperson added.

An Israeli-based spokesman for Steinmetz also said he had been released on bail.

The defence was seeking to get the warrant for his arrest cancelled "due to significant flaws in the legal process followed in Romania", the spokesman said in a statement.

A Greek court had rejected the same extradition request by Romania last year after Steinmetz was detained in Athens, the spokesman said previously.

In a separate case this year, Steinmetz was found guilty by a Swiss court of corruption linked to mining rights in Guinea, a decision his team said they would appeal at Switzerland's highest court.