Tony Mokbel, 59, arrived at court on Friday morning from prison in an armoured BearCat vehicle, with dozens of police surrounding the gates, as he was whisked into court to learn his fate.
He smiled, patted his lawyer on the shoulder and briefly spoke to his legal team ahead of the decision being handed down.
Three Court of Appeal justices decided he should be freed, about 10am, after he applied for bail earlier this week as he fights to overturn his remaining drug trafficking convictions on a long-awaited Lawyer X appeal.
"As he was required to Mr Mokbel has established his circumstances are truly exceptional," court president, Justice Karin Emerton, said.
She then went a step further in saying "he has a very strong case that his convictions should be quashed".
Mokbel had not tasted freedom since his 2007 arrest in Greece, after he famously absconded inside a yacht while on bail with a $1 million surety from his sister-in-law Renate.
His sister Gawy Saad offered $850,000 in surety to secure Mokbel's bail and said she was "sure he won't do it to anyone else" when asked about what happened to her sister-in-law.
Mokbel had agreed to abide by what his lawyer said were "stringent" bail conditions, including GPS monitoring, a curfew, daily police reporting and that he cannot leave Victoria.
Those conditions are currently being decided by Justices Karin Emerton, Robert Osborn and Jane Dixon.
He will live at Ms Saad's four-bedroom home at Viewbank, in Melbourne's northeast and she told the court she would give an undertaking to report him to police if he flouted any bail conditions.
Mokbel's barrister Julie Condon KC cited delays in hearing his appeal, the strength of his case, his poor physical health, strong ties to jurisdiction due to his family and "long-term de facto" relationship, as exceptional circumstances to prove he should be released on bail.
He is fighting to overturn drug trafficking convictions, after he pleaded guilty to heading a multi-million dollar drug trafficking empire known as "The Company".
Mokbel was represented at the time by barrister-turned-supergrass Nicola Gobbo, unaware she was informing for Victoria Police.
He is currently eligible for parole in June 2031 and an appeal over his drug trafficking convictions will be heard later this year.
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