Judge Jessica Leon issued an order Tuesday for the conditional release of Berenson, who gave birth to a son a year ago.
Berenson was arrested in 1995 and accused of aiding the leftist Tupac Amaru Revolutionary movement. The former Massachussets Institute of Technology student was sentenced to life in prison by a military court the following year.
A civilian court retried her in 2000, convicting her of the lesser crime of terrorist collaboration and reducing her sentence to 20 years.
Berenson denies any wrongdoing and maintains she is a political prisoner.