Australia's most decorated living soldier, Ben Roberts-Smith, has been released from jail after being granted bail over alleged war crimes.

The Victoria Cross recipient and former corporal in Australia's Special Air Service (SAS) Regiment was taken into custody last week, charged with five counts of the war crime of murder.

Investigators say the 47-year-old was involved in the deaths of several unarmed Afghan detainees, either by killing them or ordering a subordinate do so, between 2009 and 2012.

On Friday, lawyers for Roberts-Smith - who denies the claims - argued the "unprecedented" case will face long delays and ongoing imprisonment would prevent him being able to properly mount a defence.

Late on Friday, he was pictured leaving Silverwater Prison in Sydney in a car, giving a thumbs up to onlookers.

Judge Greg Grogin said Roberts-Smith was likely to "spend not weeks or months, but years - possibly years and years - in custody before a trial is reached".

He agreed Roberts-Smith's case was exceptional, and imposed bail conditions which he said would address prosecutors' concerns about the potential flight risk or any interference with witnesses or evidence.

Appearing via video link, dressed in prison greens, Roberts-Smith sat motionless as bail was granted.

He will have to report to police three times a week, grant them access to his electronic devices, and has forfeited his passport.

Grogin also ordered a bail surety of A$250,000 and placed restrictions on Roberts-Smith's travel within Australia.

If he breached the bail conditions, "his arrest would no doubt come very swiftly and he would find himself once again donned in green", Grogin added.

The criminal case follows a 2023 civil defamation case, in which a judge found - on the balance of probabilities - there was "substantial truth" to some of the murder claims against Roberts-Smith.

Brought by Roberts-Smith against Nine newspapers, which first published allegations of misconduct in 2018, the high-profile trial was the first time in history any court has examined claims of war crimes by Australian forces.

The charges he now faces will be tested to a higher standard - beyond reasonable doubt.

In their bail application, lawyers for Roberts-Smith described the case as "unchartered legal territory" for the country and argued there were a number of reasons Roberts-Smith should be released on bail.

Barrister Slade Howell said intense media scrutiny of the allegations may ultimately lead a judge to deem that a fair trial is "simply not possible".

If the case does proceed to trial, that path will be "beset by a multitude of delays" given the size and complexity of the material, which will include sensitive national security information.

If Roberts-Smith remained in custody, he would not be able to access or store such sensitive information in a secure environment, which would "seriously compromise his right to a fair trial", Howell said.

The case may also be held up if authorities decide to charge other soldiers allegedly involved in the incidents.

The evidence in the earlier defamation case may be "nothing like" the material in the criminal case, Howell added. "A very different picture may emerge as to the strength of the case".

In response, prosecutors argued Roberts-Smith should remain in custody given the "gravely serious" nature of the charges and the strength of their case.

Simon Buchen SC said Roberts-Smith's case was "unusual" because some of the allegations had already been heard in a court, which handed down "adverse findings".

"This application does not concern wholly untested allegations and evidence, which is ordinarily the case," he said.

He told the court that Roberts-Smith was "on the cusp" of moving overseas before his arrest, and posed a flight risk if released. He also raised concerns about the potential for interference with witnesses or evidence. (BCC)

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