Dominique Strauss-Kahn has been released from house arrest without bail after a New York court heard prosecutors doubted the credibility of his accuser.
The former managing director of the IMF smiled as he left the court following the hearing, in which his lawyers said they would seek to have the felony charges against him dismissed.
The hearing was held to seek changes to his bail conditions, and prosecutors admitted that the credibility of the woman at the center of the case had been thrown into question.
As a result, the court agreed to let Strauss-Kahn be freed and his bail and bond returned. He agreed to return to court as needed, including for a July 18 hearing.
"I understand that the circumstances of this case have changed substantially and I agree the risk that he would not be here has receded quite a bit. I release Mr. Strauss-Kahn at his own recognisance," Justice Michael Obus told the court.
Strauss-Kahn's arrest forced his resignation from the International Monetary Fund and appeared to end his presidential hopes, weeks before he had planned to declare his candidacy.
His supporters in the French Socialist party voiced delight at the apparent reversal and some said they hoped he might re-enter the 2012 presidential race.
The case has hinged on the accuser, a 32-year-old Guinean immigrant who cleaned the $3,000 (£1,868)-a-night suite at the Sofitel hotel in Manhattan where Strauss-Kahn was staying.
Prosecutors said at the hearing their change of view on the maid's credibility followed "an extensive investigation" but they gave no details.