The ministry said dozens of bodies had been found at the complex, where an AFP journalist and eyewitnesses saw tanks and vehicles pulling out.
The Israeli military did not immediately confirm any pullout.
The army launched its operation March 18, and has described it as a "precise" one targeting Hamas militants it accused of operating from the complex.
It has previously said scores of militants had been killed in fighting in and around Al-Shifa.
Hamas has denied operating from Al-Shifa and other health facilities.
"Dozens of bodies, some of them decomposed, have been recovered from in and around the Al-Shifa medical complex," the health ministry said in a statement.
The Israeli military "withdrew from the Al-Shifa medical complex after burning down the complex buildings and putting it completely out of service", it said.
"The scale of the destruction inside the complex and the buildings around it is very large."
An AFP journalist on the scene said several buildings inside the complex had been damaged, with some areas showing damage from fire.
A doctor told AFP more than 20 dead bodies had been recovered, and that some bodies had been crushed by withdrawing vehicles.