Kawsar Ahmad, 54, dropped her head in relief and her supporters gasped as Chief Magistrate Lisa Hannan granted her bail in Melbourne Magistrates Court on Friday afternoon.
It comes a week after her daughter Zeinab Ahmad, 31, lost her bid for bail in the same court.
The two women were in May charged with slavery offences after they both returned to Australia with other family members of former Islamic State fighters.
Prosecutors allege Kawsar Ahmad migrated to Syria with her husband Mohammed and their children to join Islamic State around January 2015.
It's alleged while in Syria in 2017, Mohammed bought a teenage girl as a slave for $US10,000.
The girl was repeatedly raped and beaten by Mohammed, including an incident where she was hit and dragged down two flights of stairs by the hair, the court was told.
It's alleged Ahmad agreed to the purchase and then treated the girl badly, often threatening her with beatings or the prospect of being sold.
Prosecutors allege Ahmad would ask her husband to assault the teen and while she never assaulted the girl herself, she would often scream at her over trivial matters.
In opposing bail, Detective Senior Constable Marc Clendenning told the court Ahmad was a risk to the community and there were concerns she would spread extremist ideology if released.
Ahmad's defence barrister Peter Morrissey SC argued his client did not support Islamic State and strict bail conditions including a ban on attending mosques would reduce any alleged risk.
Judge Hannan found while risk could never be entirely eliminated, Ahmad posed such a low one that stringent bail conditions could make the risk acceptable.
The judge pointed to the evidence of a psychologist who assessed Ahmad and found she no longer held radical views or posed a risk of recidivism.
"Dr (Michael) Davis says that he did not find any blatant indication that the applicant held any lingering beliefs of extremism," Judge Hannan said in her reasons.
"And there is 'simply nothing' to suggest that she is not one of the approximately 98 per cent who do not go on to reoffend."
Ahmad had made a statement through her lawyer renouncing IS and Judge Hannan said while that alone was not compelling, it carried more weight alongside Dr Davis' findings.
"In my view even a low risk of terrorism would likely be unacceptable," Judge Hannan said.
"But having regard to all matters put ... while risk can never be entirely eliminated, on the evidence before me the risk is so low that with stringent bail conditions it can be made acceptable."
The strict conditions included an 8pm to 6am curfew, not being allowed to attend any mosques and not being allowed to use a phone for anything other than phone calls, texts or government services.
Ahmad will also have to keep a log of every person who attends her bail address and hand over any passport or travel documents to police.
Ahmad will walk from Melbourne Magistrates Court later on Friday.
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