The judge, Maria Afiuni, has been imprisoned since December 2009 on charges stemming from her decision to release a banker, Eligio Cedeno, who later fled the country.
President Hugo Chavez at the time called for Afiuni to face the maximum sentence of 30 years in prison for abuse of authority and other alleged wrongdoing.
Her lawyer, Jose Amalio Graterol, called the court's decision allowing house arrest a positive step as he seeks to show Afiuni committed no crime.
Afiuni was allowed house arrest to undergo a hysterectomy and to recover from the operation, Graterol told the Venezuelan television station Globovision. He said she has suffered from vaginal bleeding and worsening health while in jail.
Human rights groups including Amnesty International and the Venezuelan group Provea have raised concerns about Afiuni's case.
Attorney General Luisa Ortega Diaz has said the judge's rights have been fully respected.
She was accused of corruption for ordering the release of Cedeno, who had been awaiting trial for three years. The banker was charged with violating currency exchange controls by obtaining $27 million in U.S. currency through the government to buy computer equipment that authorities allege never reached Venezuela.
After his release, Cedeno fled to the United States and requested asylum.