Chris Tappin, 65, of Orpington, south-east London, was originally denied bail after prosecutors claimed that he was a flight risk but will now be released from a detention centre in New Mexico either on Tuesday or Wednesday, according to one of his lawyers, Kent Schaffer.
Judge David Briones set the bail bond at one million US dollars (£620,527) and Tappin's family must pay 50,000 dollars (£31,026) before he can be released, documents filed at the US district court in the Western District of Texas show.
Tappin, who lost his two-year battle against extradition to the US, denies attempting to sell batteries for surface-to-air missiles which were to be shipped from the US to Tehran via the Netherlands. He claims he was the victim of entrapment in a "sting" organised by US government agents, but could face up to 35 years in prison if convicted.
Judge Briones also ordered that Tappin live at the home of his US defence attorney, Dan Cogdell, or else stay within a five-mile radius of his house while he awaits trial over the state border in El Paso, Texas.
The high-profile case has fuelled criticism of the UK's extradition arrangements with both the US and Europe while the attorney general, Dominic Grieve, has said that Tappin's extradition has highlighted problems with the treaty between the UK and the US that are not "readily curable".
Other critics of the 2003 treaty, including Deputy Prime Minister Nick Clegg, have described it as "one-sided", but an independent review by retired Court of Appeal judge Sir Scott Baker last year found it was both balanced and fair.
Tappin's extradition follows an investigation which started in 2005 when US agents asked technology providers about buyers who might have raised red flags.
Those customers were then approached by undercover companies set up by government agencies.
Robert Gibson, another Briton and an associate of Tappin who agreed to co-operate, was jailed for 24 months after pleading guilty to conspiracy to export defence articles.
