Last year Johal was acquitted in a case where he was accused of financially supporting the KLF terror group.
He remained in prison because he faces federal charges in eight other cases, for which he potentially faces the death penalty.
However, his legal team argues that these cases are almost identical and that the other charges should be dismissed.
There have been hundreds of hearings over the past nine years and the bail order concludes that the trial is “certainly not likely to conclude anytime soon”.
At the family home in Dumbarton, celebratory music could be heard after relatives spoke to Johal.
His brother, Gurpreet Singh Johal, who has lobbied successive governments for his release, said there had also been tears on hearing confirmation of the news.
He described his release as a “first step” but a “step in the right direction”.
“There have been so many setbacks and disappointments in the last nine years that I didn’t dare to believe it until I saw Jagtar walking out of the prison gates with my own eyes,” Gurpreet said.
“I’ll sleep well tonight, knowing that he’s not behind bars. Tomorrow morning, the fight continues. We’ll keep on fighting until he’s home with us.”