Sessions Court Judge S D Bile granted relief to Tawde as the prosecution failed to submit sufficient evidence against him.
The court asked Tawde to submit a personal surety of Rs 25,000. He was also directed to surrender his passport and not leave Maharashtra.
However, Tawde, currently lodged at the Yerwada Prison near Pune, will remain behind bars as he is also an accused in the 2013 killing of rationalist Narendra Dabholkar in Pune.
Tawde is the leader of the Hindu Janjagriti Samiti, believed to be an offshoot of right-wing group Sanatan Sanstha.
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Unidentified assailants shot Pansare (85) and his wife Uma on February 16, 2015 in Kolhapur.
The Left leader died in a hospital in Mumbai after four days. His wife survived the attack.
A special team of the state CID is probing the case.
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