Victorian Supreme Court Justice Rita Incerti granted bail to Steven Johnson, 73, on Friday morning, five months after he was charged with the murder of Christopher Jarvis.
Johnson, who was seated in the dock wearing a neck brace, pulled off his glasses and wiped away tears as he learnt of the decision.
"Thank you, Your Honour," Johnson told Justice Incerti.
"I will obey all those (bail) orders, as I have previously."
Mr Jarvis, 38, was last seen leaving his home in Wangoom, near Warrnambool, in Victoria's west, in June 2006.
His body has not yet been found but police believe it is buried in Framlingham Forest, a native woodland owned by an Indigenous trust.
Johnson was first charged with Mr Jarvis' murder in November 2022 but the charge was dropped in August 2023.
His alleged co-accused Glenn Fenwick ultimately pleaded guilty to the lesser charge of manslaughter after agreeing to make a statement to police against Johnson.
Fenwick, who could be released on parole as early as October, claims he joined Johnson in confronting Mr Jarvis over outstanding rent.
It's alleged Johnson struck Mr Jarvis in his driveway, threw him to the ground and then fired a starter pistol near his ear when he would not stop screaming for help.
Fenwick claims he only helped hold Mr Jarvis down and then load him into the boot of the car, before they all drove to Framlingham Forest.
It's alleged Johnson then struck Mr Jarvis to the head with a baseball bat before removing his clothes and burying him in a shallow grave.
Johnson's barrister Patrick Doyle SC on Thursday argued the prosecution case against his client was weak as it centred around Fenwick's evidence.
There were discrepancies in Fenwick's story and the fact he made the statement to receive a discounted sentence would give a jury reason to pause, Mr Doyle said.
But Justice Incerti on Friday found the prosecution's case against Johnson could not be described as weak, although there were triable issues.
She accepted much of the evidence against Johnson came from Fenwick and the ultimate strength or weakness of his account would be examined at a committal hearing in January.
"Credibility and reliability will be a central issue in this case," Justice Incerti said.
The judge pointed to Johnson's "special vulnerabilities" including his age and medical conditions as exceptional reasons why he should be granted bail.
She noted those vulnerabilities have made his time in custody more difficult, as he has not received some of the medical care he needed.
Justice Incerti also rejected prosecution claims Johnson was an unacceptable risk of contacting Fenwick or moving Mr Jarvis' body if released.
She said a series of bail conditions, including a no-contact order and a ban from entering Framlingham Forest, could alleviate any concerns.
Johnson's wife put forward a $500,000 surety as part of his bail, while the 74-year-old will also have to follow a 9pm to 6am curfew.
He walked out of the Supreme Court building on Friday afternoon, flanked by his wife and son who shoved at media.Â
Johnson will return to Warrnambool Magistrates Court in January for his committal hearing.