Police say he was freed pending a report to the Public Prosecution Service.
Detectives from the PSNI’s Major Investigation Team probing Mr McErlain’s murder had been granted additional time the question the 50 year old man until today.
Yesterday, Christopher Patrick Keenan, of no fixed abode, appeared in the dock of Coleraine Magistrates’ Court for a first remand hearing.
The body of Mr McErlain, 48, was found at a house in the Broombeg View area of Ballycastle on Thursday.
No bail was applied for and 33-year-old Keenan was remanded in custody to face the same court on Monday, February 29.
The senior detective leading the investigation, Detective Chief Inspector Gareth Talbot, said: “I would like to take this opportunity to thank the community in Ballycastle for their help and cooperation over recent days as the investigation team has gone about investigating this vicious crime.
“The support we have received has been phenomenal.
“We are grateful to all of those who have been working with us to piece together a clearer picture of Mr McErlain’s movements and of the circumstances leading up to his death last Thursday.
“I would ask anyone who may be able to help but who has not yet spoken to police, to please do so. The number to call is 101.
“If someone would prefer to give their information without leaving their details they can contact the Crimestoppers charity on 0800 555 111,” added DCI Talbot.