The division bench of High Court comprising Justice V M Sahai and Justice R P Dholaria, accepted Kodnani's application seeking bail on health grounds.
With this, she becomes the the first accused to get bail in the Naroda Patiya riots case.
The court has given her regular bail on the bond of Rs one lakh and has exempted her from appearing before the police during her bail period as she is not keeping well.
Kodnani had also submitted in the bail plea that her appeal challenging the judgement of special court is pending before the Gujarat High Court since December 2012. The appeal is not likely to be heard in near future, and considering this she should be released on bail, it said.
Also Read
Earlier in February, Kodnani was given temporary bail by the High Court. However later in the same month she was denied the extension of the release period.
The court had named Kodnani, a minister in the former Gujarat Chief Minster Narendra Modi's cabinet, as "a kingpin of riots" in Naroda area and sentenced her to 28 years' imprisonment.
Kodnani, who was the MLA of Naroda at the time of riots, was made Minister of State for Women and Child Development in 2007. She had to resign after her arrest in the case in March 2009.
The massacre had taken place a day after the Godhra train burning incident of February 27, 2002.