The 39-year-old Australian was in court to hear the judge reject an appeal on behalf of Swedish prosecutors against a ruling Tuesday by a lower court that he be bailed.
"I am going to grant conditional bail," judge Duncan Ouseley said.
He endorsed the stringent bail conditions imposed by the lower court, that Assange´s supporters must pay a 240,000-pound (283,000-euro, 374,000-dollar) surety and he be subject to electronic tagging and a curfew.
The judge made a slight change to the arrangements for Assange to report regularly to police near a supporter´s country mansion in eastern England where he must stay.
Bail was also only granted on condition that 200,000 pounds in cash of the surety is made available to the court by the end of the day.
Assange´s lawyer, Mark Stephens, earlier indicated that he would have the money in time.
Sweden wants Britain to extradite Assange for questioning over claims of rape and sexual molestation against two women in Stockholm in August, offences which he denies and which his lawyers argue are politically motivated.
They cite the timing of his arrest, which coincided with the release by the whistle-blowing website of thousands of confidential US diplomatic cables that have caused huge embarrassment and anger in Washington.
Assange´s mother, Christine, and supporters including campaigning journalist John Pilger, had packed out the courtroom for the hour-and-a-half hearing along with hordes of journalists.
"I appreciate all the support," Christine Assange told reporters afterwards.
Other supporters gathered in driving rain outside the Gothic court house shrieked with delight at news of the ruling and chanted "exposing war crimes is no crime".
Inside, the judge rejected the assertion by British lawyers acting on behalf of Sweden that Assange was a flight risk.
"The court does not approach this case on the basis that this is a fugitive from justice who seeks to avoid interrogation and prosecution," the judge said.
Another condition of bail was that Assange live at the country estate of Vaughan Smith, an ex-British army officer who founded the Frontline Club, a media club in London where WikiLeaks has based part of its operations.
He must stay there during the extradition proceedings, which may take months.
Speaking before the court hearing, Pilger said: "I hope he will be released -- he should be, he is an innocent man until proven otherwise."
Thailand´s royal family was the subject of the latest WikiLeaks revelations Thursday, as a memo from the US embassy in Bangkok showed top palace officials expressed concern about the prospect of the crown prince becoming king.
Three influential Thai figures, including two senior advisers to revered King Bhumibol Adulyadej, "had quite negative comments about Crown Prince (Maha) Vajiralongkorn," said the memo dated January 2010.
Another leaked cable also revealed that an oil platform in Azerbaijan operated by BP suffered a well blowout and a huge gas leak around 18 months before the Gulf of Mexico spill.
US President Barack Obama has led worldwide condemnation of WikiLeaks, dubbing their actions as "deplorable", and Washington is pursuing an investigation into how the website obtained the information.
But WikiLeaks and its founder have also won global support -- hackers have attacked credit card and payment firms who restricted funds to the website, and more than 660,000 people have signed an online petition of support.
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