Public broadcaster NHK said Ghosn could be released on Thursday or Friday if any appeal by prosecutors is rejected by the court and bail is granted.
A source close to the investigation has said Ghosn and Kelly allegedly put the system in place after a new law came in obliging the highest-paid members of the firm to declare their salary.
On Dec. 10, Ghosn and Kelly were charged with underreporting about $43 million worth of income in Nissan's annual reports for the five fiscal years through March 2015.
Other lawyers such as Tsutomu Nakamura, a former public prosecutor who is the founder of Nakamura International Criminal Defense in Tokyo, suggested that the court decision doesn't necessarily mean Ghosn may walk out of jail immediately. Otsuru's office didn't respond to a request for comment from CNN.
Executives at the French and Japanese automakers considered a plan in 2010 to pay some of Ghosn's compensation through Renault-Nissan BV, the Dutch holding company that runs their alliance, "without disclosing it publicly", according to an email seen by Bloomberg News. He was re-arrested on December 10 for the same alleged crime covering the past three years. At the same time, Nissan is also trying to block access to homes used by Ghosn in Beirut and Rio de Janeiro (roughly worth RM36.6 million and RM12.54 million respectively), part of a global network of real estate owned by the carmaker and provided to its ousted chairman.
Media stands outside Tokyo Detention Center, where former Nissan chairman Carlos Ghosn and former another executive Greg Kelly are being detained.
Since his arrest last month, the once jet-setting executive has languished in a tiny cell in a detention center in northern Tokyo, where he has complained about the cold and the rice-based menu. But his right-hand man, Kelly, may be released next week, with a request for bail filed Friday by Kelly's lawyer pending court approval. The conviction rate in Japan is more than 99 percent for any crime.
A Nissan spokesman declined to comment on the court's decision, saying the pair's detention was a matter for prosecutors.
In this May 12, 2016, photo, then Nissan Motor Company President and CEO Carlos Ghosn speaks during a joint press conference with Mitsubishi Motors Corp.in Yokohama, near Tokyo.
Ghosn, a French citizen who was born in Brazil, joined Nissan in 1999 and brought the ailing automaker out of its financial difficulties under a capital alliance with Renault.
A June 13 Reuters report revealing the plan was denied by Ghosn at Renault's shareholder meeting two days later. While there, he had a one-on-one meeting with Renault interim chief Thierry Bollore that Saikawa described as "positive" and "productive", according to Nissan.
It added that Saikawa remained ready to directly share with Renault the details of its internal investigation into Ghosn's alleged wrongdoing at any time.
Kelly's wife, Donna Kelly, said in a video message carried by TV Asahi and other networks that her husband was "wrongly accused as part of a power grab" at Nissan.More news: Manny Machado Follows Phillies Shortstop on Instagram