John Downey, who has been arrested in the Irish Republic over the 1972 murders of two soldiers in Northern Ireland, has been granted bail at Dublin High Court subject to the approval of financial guarantees.
John Downey was detained by Gardai on Monday evening under a European Arrest Warrant as part of a joint operation with the PSNI.
The 66-year-old appeared before the High Court in Dublin on Tuesday as Northern Ireland prosecutors seek to extradite him to face charges of murder.
Explaining the rationale for granting bail, the judge highlighted that Downey had been on bail during court proceedings in England and had abided by all conditions.
Downey is expected to walk out of the court building later on Thursday if information the judge has requested on bail guarantees is received.
The Sinn Fein member, wearing a red jumper and checked shirt, remained impassive in court as his conditional bail was approved.
Lance Corporal Alfred Johnston, 32, a father-of-four, and Private James Eames, 33, a father-of-three died when an IRA bomb exploded in a car they were checking on the Irvinestown Road, Cherrymount, Enniskillen on August 25, 1972.
In 2013, Downey was charged with murdering four Royal Household Cavalrymen in a bomb in Londons Hyde Park in 1982.
He stood trial at the Old Bailey, but the case dramatically collapsed after it was revealed he had received a written assurance from former prime minister Tony Blairs government that he was not actively wanted by the authorities.
Trial judge Mr Justice Sweeney ruled that Downeys arrest at Gatwick Airport, as he transited the UK on the way to a holiday, represented an abuse of process and he put a stay on any future prosecution in relation to the Hyde Park case.
A number of supporters including three Sinn Fein TDs, Pearse Doherty, Sean Crowe and Dessie Ellis, were also in court for Tuesdays proceedings.
John Downey, 66, was released from Cloverhill prison in the city on Thursday evening after bail of €35,000 (£30,000) was approved by the judge, Justice Aileen Donnelly.
The Garda Síochána arrested him on Monday at his home in Co Donegal on foot of a European extradition warrant over the deaths of L/Cpl Alfred Johnston, 32, and Pte James Eames, 33, two soldiers from the Ulster Defence Regiment who were killed by an IRA bomb in Enniskillen, Co Fermanagh, on 25 August 1972.
Gardaí objected to bail, saying Downey was a flight risk because of the gravity of the offences and potential sentence if convicted. In granting bail, Donnelly noted that Downey had been on bail during court proceedings in England and abided by all conditions.
Downey was accused in 2013 of involvement in the 1982 Hyde Park attack in which four soldiers from the Household Cavalry were killed along with seven horses. His trial collapsed at the Old Bailey in 2014 because of a secret letter from the British government that gave him a guarantee he would not face trial, a revelation that caused uproar.
Downey was one of 187 IRA suspects given clear and unequivocal assurance that they were no longer wanted by any police force in the UK, a concession by the British government to secure an IRA promise to decommission its arms as part of the 1998 Good Friday peace deal.
His arrest this week on suspicion of the 1972 bombing was welcomed by relatives of the two soldiers as well as Unionist politicians in Northern Ireland. But Sinn Féin described the arrest as a politically motivated persecution of a republican who had aided the peace process.
In arguing for bail, Downeys lawyer cited his health, saying he had recently had a pacemaker fitted.