The court issued the bail order on execution of bond of Rs 5 lakh and two securities of the like amount.
It directed Reddy, who was arrested in September last year, to surrender his passport and not to interfere in the investigation into the other illegal mining cases or influence witnesses.
"The petitioner (Gali) shall remain in Bellary (Karnataka) and is permitted to attend other cases in Bangalore," the judge ordered.
The judge dismissed the plea by the CBI to suspend the implementation of bail order as it wanted to file a petition in the Andhra Pradesh High Court against it.
Gali Janardhan Reddy and his brother-in-law B V Srinivsas Reddy, Managing director of the mining company, were arrested on September 5 from Bellary and brought to Hyderabad. The CBI had filed a chargesheet against Janardhan Reddy and others on December 3 in OMC case and took him to Bangalore in connection with another illegal mining case in Karnataka.
OMC is accused of changing mining lease boundary markings between Andhra Pradesh and Karnataka and indulging in illegal mining in the Bellary Reserve Forest areas, spread between Bellary district of Karnataka and Anantapur district of Andhra Pradesh.
They have been charged under section 120-B (criminal conspiracy), 409 (Criminal breach of trust by public servant), 420 (cheating), 468 (forgery for purpose of cheating) and Section 471 (using as genuine a forged document or electronic record) of IPC and relevant sections of Prevention of Corruption Act.