Dominique Strauss-Kahn has had his four million euro bail returned and been released on his own recognisance, this was decided by judge in Manhattan.
His passport has been confiscated meaning he cannot leave the United States and must attend all court proceedings.
New York prosecutors will continue their investigation and re-examine evidence in the case against the former IMF chief who is charged with attempting to rape a hotel maid.
Sources close to the case say questions about the credibility of Strauss-Kahn’s accuser have been raised.
The 32-year-old maid admits she had told lies about her asylum application and about what she did after the alleged rape, which she maintains took place.
Her lawyers defended her story outside the court with graphic details of the alleged attack.
Strauss-Kahn was charged with sexual assault at the Sofitel Hotel in New York on May 14 and has been held under house arrest.
The French politician, who had been seen as a leading Socialist candidate to challenge French President Nicolas Sarkozy, attended the unexpected court appearance with his wife, the French journalist Anne Sinclair.
His lawyer said he would pursue a dismissal of all charges against his client. He said Strauss-Kahn is innocent and his story has never changed.
His next court appearance is set for July 18.