The news came during a weekend of start-and-stop announcements about the release of Sarah Shourd, who was detained with two friends, Shane Bauer and Josh Fattal, along the Iran-Iraq border on July 31, 2009, and accused of spying.
The woman's Iranian lawyer met with the three Americans in Tehran's Evin prison yesterday and said he was hopeful Ms Shourd would be released in the next two or three days. Tehran prosecutor Abbas Jafari Dowlatabadi said the bail conditions did not bar her from leaving the country, although her case would still go to trial along with those of the other two Americans.
The official IRNA news agency quoted Mr Dowlatabadi as saying: "Based on reports and the approval of the relevant judge about the sickness of Ms. Shourd, her detention was converted to $500,000 bail, and if the bail is deposited, she can be released."
Ms Shourd's mother has said she has been denied treatment for serious health problems, including a breast lump and precancerous cervical cells.
The Americans' lawyer, Masoud Shafiei, met them in the prosecutor's office at the prison and said he provided a final letter of defence in their case. He said it was the first meeting he was allowed with them in person since being hired by their families in late 2009.
"All of the three were fine and I was with them for about three hours," Mr Shafiei said. He added that he was hopeful "Shourd will go home within the next two to three days."
Mr Shafiei later said that Ms Shourd "was naturally very happy and even the two male prisoners were glad about Sarah's freedom, but Sarah had expected all three of them to be released."
Mr Shafiei said he had been in contact with the Swiss Embassy in Tehran to make arrangements for the $500,000 bail payment for Ms Shourd. The Swiss Embassy represents US interests in Iran because the two countries do not have direct diplomatic relations.
Ms Shourd, who has been held in solitary confinement, was to have been released on Saturday as an act of clemency to mark the end of the Muslim holy month of Ramadan after the intervention of Iran's president, Mahmoud Ahmadinejad but the judiciary abruptly halted that planned release, indicating such a decision would have to first go through the courts.
Iran has accused the three Americans of illegally crossing the border and spying in a case that has deepened tensions with Washington – which has led the push for tougher sanctions on Iran over its nuclear program.
Their families say the Americans were hiking in northern Iraq and that if they crossed the border, they did so unwittingly.
The prosecutor said the two other Americans would remain in custody. He said the prosecution's case against the three was nearly complete and there was enough evidence for a judge to issue indictments for all three on charges of spying.
"The three are still suspects and though the accusations have not been proven yet, they had equipment and documents and received training that shows they had not come to Iraq and Iran for entertainment," Mr Dowlatabadi was quoted as saying by the IRNA news agency.
The prosecutor rejected any link between the bail decision and the return to Iran in July of nuclear scientist Shahram Amiri. Iran had accused the US of abducting him, while Washington said he was a defector who later changed his mind.
The judiciary appeared to be using the issue of Ms Shourd's release to flex its muscles in an internal political tussle with President Ahmadinejad.