Doctors said the congresswoman's cognitive abilities and physical strength have improved to the point where she no longer needs to remain a patient in the hospital.
"We are very excited that she has reached the next phase of her rehabilitation and can begin outpatient treatment. We have no doubt that she will continue to make significant strides in her recovery," said Dr. Gerard Francisco, the hospital's chief medical officer.
Giffords was shot in the head on Jan. 8 when she was meeting with constituents in Tucson. Six people were killed and a dozen others wounded in the attack outside a supermarket.
Giffords will move to League City, a town 26 miles south of Houston, to a home owned by her husband, astronaut Mark Kelly. She will continue outpatient therapy at a facility that is part of the TIRR Memorial Hermann system, the Houston hospital where she has been undergoing intensive rehabilitation since late January.
"Gabby gives her all to everything she does and that's exactly what she's been doing at TIRR since Jan. 26," Kelly said in a prepared statement. "The remarkable progress she has made since then is a testament to both her single-minded determination to get better and the team of medical professionals overseeing her care."
The Associated Press contributed to this story.