"I am going to, after all these years, grant unconditional release to Mr Hinckley," US District Judge Paul Friedman said during a court hearing in the District of Columbia.

In 2016, Friedman allowed Hinckley to move out of a Washington psychiatric hospital, where he had lived for three decades, but imposed restrictions on his travel and internet usage.

Friedman said during Monday's hearing that he planned to lift those remaining restrictions.

Hinckley's mental health problems were "in remission" and he no longer posed a danger, Friedman said.

Friedman said he would issue a written order later this week memorialising his decision.

A federal prosecutor, Kacie Weston, said during the court hearing that the US Justice Department agreed Hinckley should be given unconditional release.

But Weston argued the restrictions should not be formally lifted until June 2022 so prosecutors can continue to monitor Hinckley as he transitions to living on his own following the death of his mother.

Reagan's daughter Patti Davis wrote in an opinion piece in the Washington Post she opposed Hinckley's release and feared now he could contact her.

"I don't believe that John Hinckley feels remorse," she wrote.

Reagan suffered a punctured lung in the assassination attempt but recovered quickly.

Others wounded included White House press secretary James Brady, Secret Service agent Timothy McCarthy and Washington police officer Thomas Delahanty.

Hinckley was found not guilty by reason of insanity at a 1982 jury trial.

That verdict prompted Congress and some US states to adopt laws limiting use of the insanity defence.

The shooting helped launch the modern gun control movement as Brady, who was left permanently disabled, and his wife, Sarah, founded what is now known as the Brady Campaign to Prevent Gun Violence.

Australian Associated Press