The shock decision will see the auto executive released after more than three months in detention. The court reportedly set bail at one billion yen (£6.8million) and said he could be released as early as Tuesday. Bail is rarely granted in Japan without a confession and the length of Mr Ghosn’s detention had drawn some criticism.
Mr Ghosn faces three charges of financial misconduct including understating his income and aggravated breach of trust.
He has consistently denied the charges of financial misconduct.
The 64-year-old was the architect of the Renault-Nissan alliance and brought Mitsubishi on board in 2016.
Mr Ghosn appointed a new legal team last month.
He has now spent three months in a Japanese jail.
On Monday the head of his defence, Junichiro Hironaka, said he was optimistic Mr Ghosn would be granted bail.
The 64-year-old has been in custody since his arrest last November on allegations he understated his income at Nissan.
He says he is innocent of charges of falsifying Nissan financial information and breach of trust.
The former high-flying executive’s legal team submitted a request for bail for the third time with a Tokyo court on Thursday.
It was the first such request has been filed by his recently reshuffled legal team.
All previous requests for bail had been denied, with prosecutors filing fresh charges against him.
The court grants a release on bail if it determined a suspect is unlikely to destroy evidence or flee.