The Kocaeli governor's office said that the hostages were unharmed, adding that the operation to rescue them was launched after negotiations with the hostage-taker failed.
"Our security forces intervened and neutralised the suspect," the statement said, adding that he was an employee of the factory who "wanted to draw attention to the ongoing occupation in Gaza."
The hostage-taker entered the factory in Gebze industrial zone in Kocaeli province around 3 p.m. (1200 GMT), the Demiroren news agency said earlier, adding that police had then rushed to the scene and sought to persuade him to give himself up.
The hostages were six men and a woman, media reports had said.
A photo released by local media earlier showed a man inside the factory whose face was covered with a Palestinian scarf and who was wearing what looked possibly like an explosive device.
Another photo from the scene showed the man holding a gun in one hand and making a 'V' sign with his other hand in front of a wall on which Turkish and Palestinian flags were painted with a script that reads: "Gates will open. Either coffin rest or death for Gaza."
(Reporting by Huseyin Hayatsever and Daren Butler; Editing by Andrew Cawthorne, Nick Macfie, Hugh Lawson and Sonali Paul)
