The conditions for bail include a $5 million insurance bond, the surrender of all travel documents and the terms of home confinement proposed by Strauss-Kahn's defense team, which included electronic monitoring.
Strauss-Kahn has been held at New York's Rikers Island since Monday on charges of sexually assaulting a hotel maid. He will stay one more night in jail and will be allowed to post bond on Friday.
The 62-year-old diplomat and banker arrived at the courthouse wearing a gray suit. He turned to give a quick smile to supporters in the gallery that included a daughter and his wife, Anne Sinclair.
As the bail hearing began, the court unsealed the seven-count indictment against Strauss-Kahn. He was indicted on four major felony charges.
While Strauss-Kahn's charges could carry a prison sentence in excess of 25 years, according to legal experts, a plea deal is more likely. In the case of a plea deal, a sentence of five years or less would be expected, experts said.
In court papers filed by his defense team, Strauss-Kahn said he had surrendered his passport and wouldn't flee the country.
Strauss-Kahn continues to deny the charges, but on Wednesday, he resigned from the IMF, saying he wanted to protect the organization and his family.
The IMF said it will soon begin the process of choosing a new director.
Europe has staked its traditional claim to the post even as fast-growing nations like China and Brazil say it's time to break that monopoly and seek an IMF chief from a developing nation. The IMF is empowered to direct billions of dollars to stabilize the global economy.
In Washington, where the IMF is based, U.S. Treasury chief Timothy Geithner said "We want to see an open process that leads to a prompt succession."
The Associated Press contributed to this story.