Steven Gallant - who tackled terrorist Usman Khan on London Bridge on November 29, 2019, when he was on day release from prison - was granted a Royal pardon for his actions.
The Parole Board has now agreed his early release from prison.
Convicted terrorist Khan fatally stabbed Cambridge graduates Jack Merritt, 25, and Saskia Jones, 23, and injured three other people before running on to London Bridge.
Khan, who had two large knives and a fake suicide belt, was detained on the bridge by three men before he was shot dead by police.
Mr Gallant has served 16 years of a life sentence for the murder of Hull firefighter Barrie Jackson in 2005.
Mr Gallant's solicitor Neil Hudgell said: "When I first met Steve he struck me as a hugely articulate and reflective person with a wealth of insight into the prison system.
“He is a shining example of reformation not only for himself, but others he has helped.
A spokesperson for the Parole Board said: “We can confirm that a panel of the Parole Board has directed the release of Steven Gallant following an oral hearing.
“Parole Board decisions are solely focused on what risk a prisoner could represent to the public if released and whether that risk is manageable in the community.
“A panel will carefully examine a huge range of evidence, including details of the original crime, and any evidence of behaviour change, as well as explore the harm done and impact the crime has had on the victims.
“Members read and digest hundreds of pages of evidence and reports in the lead up to an oral hearing.
“The prisoner and witnesses are then questioned at length during the hearing which often lasts a full day or more.
“Parole reviews are undertaken thoroughly and with extreme care. Protecting the public is our number one priority.
“This decision is provisional for 21 days.”