After the aircraft landed at Larnaca airport, the hijacker released everyone onboard except three passengers and four crew following negotiations, Civil Aviation Minister Sherif Fathy said. He declined to give their nationalities.
Eighty-one people, including 21 foreigners and 15 crew, had been onboard the Airbus 320, Egypt's Civil Aviation Ministry said in a statement.
The Cyprus Broadcasting Corporation (CyBC) and a private broadcaster, Antenna, said the hijacker was asking for the release of women prisoners in Egypt, suggesting a political motive.
He had also asked to get in touch with European Union officials, CyBC reported, citing a letter the hijacker dropped onto the apron at Larnaca airport.
The plane remained on the tarmac at Larnaca throughout the morning while Cypriot security forces took up positions around the scene.
Security sources in Egypt said a separate New York-bound flight from Cairo was delayed due to security fears related to the hijacking. They gave no more details.
While the reasons for the hijacking were not entirely clear, the incident will deal another blow to Egypt's tourism industry and hurt efforts to revive an economy hammered by political unrest following the 2011 uprising.
The sector, a main source of hard currency, was already reeling from the crash of a Russian passenger plane in the Sinai in late October.
President Abdel Fattah al-Sisi has said it was brought down by a terrorist attack. Islamic State has said it planted a bomb on board, killing all 224 people on board.
The latest reports on Tuesday's hijacking contradict earlier statements by Cypriot President Nicos Anastasiades and other Cypriot security sources suggesting the hijacker's motives were personal and linked to an ex-wife who lived in Cyprus.
There was also some confusion over the identity of the hijacker. Egypt's official state news agency MENA initially named him as Egyptian national Ibrahim Samaha but later said the hijacker was called Seif Eldin Mustafa.
The Cypriot Foreign Affairs Ministry also identified the hijacker in a tweet as Mustafa.
The Civil Aviation Ministry said the plane's pilot, Omar al-Gammal, had informed authorities that he was threatened by a passenger who claimed to be wearing a suicide explosives belt and forced him to divert the plane to Larnaca.
"We do not know until now if this was a threat or if he was really wearing an explosive belt," Fethy told the news conference, adding that the hijacker was not carrying a gun.
Witnesses said the hijacker threw a letter on the apron of the airport in Larnaca, written in Arabic, asking that it be delivered to his ex-wife, who is Cypriot.
Passengers on the plane included eight Americans, four Britons, four Dutch, two Belgians, an Italian, a Syrian and French national, the Civil Aviation Ministry. The Dutch Foreign Ministry said earlier a Dutchman was among the foreigners still aboard.
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