Question: "Why is God going to release Satan after the 1,000 years?"
Answer: Revelation 20:7-10, "When the thousand years are over, Satan will be released from his prison and will go out to deceive the nations in the four corners of the earth—Gog and Magog—to gather them for battle. In number they are like the sand on the seashore. They marched across the breadth of the earth and surrounded the camp of God's people, the city he loves. But fire came down from heaven and devoured them. And the devil, who deceived them, was thrown into the lake of burning sulfur, where the beast and the false prophet had been thrown. They will be tormented day and night for ever and ever."
As we read these verses, we wonder, "Why will God release Satan at the end of the Millennial Reign of Jesus Christ?" First, we must admit that there are some biblical questions which we cannot answer this side of glory because God has chosen to reserve some mysteries to Himself (Deuteronomy 29:29, Romans 11:33-36). Yet, as believers, even if we cannot always understand something about God's Word, His will, or His ways, we can be sure that He remains ever faithful, true, and trustworthy, and in light of that our job remains to obey what we do understand as quickly, fully, and well as we are able. Even if we might not be able to answer why God releases Satan, we can suggest some possible reasons and motivations, based on an understanding of the entirety of the Word of God.
At the beginning of the Millennium, only believers will be alive (Revelation 19:17-21), some who live through the Tribulation Period, and some who come back with the Lord at His second coming. It will be a time of peace unparalleled in history (Isaiah 2:4; Micah 4:3). Jesus will be ruling on the throne of David, imposing a benevolent theocracy on all of His creation. Jesus will ensure that everyone has every need fulfilled, while not tolerating the sin so prevalent in today's society (Psalm 2:7-12; Revelation 2:26-29; 12:5; 19:11-16). We can only imagine such a time of "heaven on earth."
The believers who live through the Tribulation will be mortal. They will live and repopulate the earth during the Millennial Kingdom. Without the devastation of sin taking its toll, we can imagine the population increase during the Millennium will be enormous, almost incomprehensible. All those who are born during the Millennium will enjoy the benefits and blessings of Christ's reign on the earth, but they will still be born with a sin nature, and they will still have to freely repent and believe the Gospel, personally choosing Christ as Savior and Lord.
Yet, at the end of the Millennial Reign, Satan is loosed and is able to deceive a vast multitude to follow him in one final rebellion against the Lord of glory and His saints! It seems that the further humanity gets from the end of the Tribulation and the start of the Millennium, the more they will "take for granted" how good they have it, and some may even harbor doubts about the goodness of God. Even though the number who rebel with Satan are said to be "as the sand of the sea" (Revelation 20:7), they may still be a minority compared to the number who do not rebel. It will still be a large number of souls who join Satan. Undoubtedly, one of the primary reasons God gives us this picture of what will happen in time is to demonstrate the deep-seated sin nature inherent in all of humanity (Jeremiah 17:9).
Additionally, God is trying to tell us something about His nature as displayed during the Millennium. His grace and goodness will be on display continually. But at the end of the 1,000 years, He will have zero tolerance for rebellion. When it happens, He will show no mercy and offer no "second chances." At that time He will be quick to judge, and the final rebellion of Satan and sinful man will be over in a flash of fire. After this, the final judgment of the dead takes place (the Great White Throne Judgment, Revelation 20:11-15). Eternity can thus begin with every aspect of sin gone for all time.
Finally, God is trying to reinforce some very important lessons concerning Satan himself, especially for believers. First, that he has been and always will be the enemy of humanity. As God has fixed His love on us, Satan has for us a special hatred. Ever since Satan's fall (Isaiah 14, Ezekiel 28), he has been the adversary of believers, and he is aptly described as the ultimate deceiver of mankind (John 8:44; 1 John 2:22). All he can give or promise man is death and destruction (John 10:10a). Satan is also shown here to be a truly defeated foe, and his ultimate doom is certain, along with the doom of all who follow him. God is trying to remind us that Satan is a created being who is powerless before Him (2 Corinthians 12:7). All this should encourage believers today to take God at His Word concerning our position in Christ with respect to the devil (Matthew 4:1-11; Luke 4:1-13; 1 Corinthians 10:13; 2 Corinthians 4:1-7; James 4:6-8; 1 John 2:15-29; 1 John 4:1-3), especially as we remember this grand truth: "...greater is he that is in you, than he that is in the world" (1 John 4:4).