Tate, a British-American former kickboxer with millions of online followers, along with his younger brother and two Romanian women, are under investigation for allegedly "forming an organised criminal group, human trafficking and rape".
Tate, 36, and his brother Tristan, 34, were arrested in late December, and have been held in pre-trial detention ever since, which was again extended last week.
However, an appeals court "rejected the prosecution's proposal to extend the pre-trial detention" and ordered the pair be placed "under house arrest", according to a court ruling seen by AFP.
Accompanied by their Romanian lawyers, the brothers -- who deny all charges brought against them -- were released around midnight (2100GMT) from the police central arrest premises in Bucharest amid chaotic scenes, an AFP journalist reported.
Media thronged the entrance while young fans greeted Andrew Tate with cries of "Top G" (for gangster), his nickname.
Andrew did not speak, however his brother Tristan said the judges had made "the right decision" and vowed to prove that he was "an innocent man."
Their lawyer Eugean Vidineac said they were forbidden from contacting other people involved in the case and could not "leave their home without prior approval from judicial authorities."
Earlier, he insisted the brothers were not a flight risk.