Pastor Ezekiel Odero was released on Sh3 million bond or Sh1.5 million cash bail on Thursday.
The prosecution had applied to detain Odero for 30 days, citing fresh affidavits in a case involving mass deaths.
However, Shanzu senior principal magistrate Joe Omido threw out the application.
The preacher of New Life Church and Prayer Centre had already spent seven days in custody at Port police.
He was ordered to report to a police station once a week or as required by the state.
Odero is also not supposed to talk publicly about anything concerning the Shakahola issue
One of his lawyers Cliff Ombeta had earlier told the Star that they would be asking for favourable bail terms for the client, who had already spent seven days in police custody.
Danstan Omari, who is also Odero's lawyer, said they objected to such tactics by the state.
"The respondent should be allowed to go home or a charge sheet be produced," he said.
Hundreds of followers of Pastor Ezekiel broke into songs and dances after a Shanzu Magistrate Court released him.
According to the Director of Public Prosecution, Odero is being investigated for at least 14 offences that include; murder, aiding suicide, abduction, radicalization, genocide, crimes against humanity, child cruelty, fraud and money laundering.
However, he is yet to be charged officially.
On Thursday, the DPP applied afresh for the court to allow the police a one-month extension to continue holding the preacher, but his lawyer vehemently objected, saying the State had failed to prove that they have anything against their client.
The prosecution counsels argued that they were investigating new charges that involved terrorism and murders of alleged Odero’s followers.
Odero, whose New Life Prayer Centre and Church has since been closed down by the government, was represented by lawyers Jared Magolo, Omari, Ombeta and Shadrack Wambui.
On Tuesday, Shanzu Principal Magistrate Joe Omido allowed the police to hold Odero for seven days to conclude their investigation.
The seven-day detention was to run from April 27, when the pastor was first arrested, to Thursday, May 4.
Odero’s lead counsel Omari told the court that the pastor should be let free if the DPP fails to prefer any charges, adding that they are also ready to be given a bond with strict conditions.
“We completely object to such tactics by the State to ask for more days. We vehemently object. The respondent should be allowed to go home or a charge sheet is produced,” said Omari.
Magolo told the court that initially they had preferred to charge the preacher with over 10 charges, but in the new affidavit, only one charge of murder was being cited.
“Seems the investigation is zeroing on murder. That is a reduction from the over 10 counts we were told last week. Other than to persecute Odero, the State has no intention to charge him,” he said.
However, while delivering his ruling, Omido said the DPP failed to give a compelling reason to be allowed to continue holding Odero.
“The State has failed to answer the question of how will the respondent’s liberty hamper investigation and interfere with witnesses. I find that the State has not acted in absolute no good faith in applying to continue holding the respondent for another 30 days,” ruled Omido.
After releasing Odero, Omido gave conditions that the pastor should appear before a local police station once every week or as required by the State.