Mr Kalmadi has been in jail since April. He is accused of conspiracy regarding the awarding of commercial contracts for the Games.
He denies any wrongdoing. The build-up to the Games was marred by allegations of sleaze and incompetence.
He was removed from his post in January last year.
The court also granted bail to former Games organising committee official VK Verma.
The court has set bail at 500,000 rupees ($10,000) for Mr Kalmadi and Mr Verma and they are set to leave the Tihar Jail once the bail formalities are completed in the next 24 hours.
The Central Bureau of Investigation (CBI) arrested Mr Kalmadi “for conspiracy to cause favour to a company in Switzerland while procuring timers and scoring equipment for the Games”.
If found guilty he could face years in prison. Mr Kalmandi denies the charges.
The row over the Games is one of a series of corruption scandals that has rocked India in recent months.