Frank Ostrowski speaks to reporters outside court after being granted bail on Friday. (CBC)

Frank Ostrowski will be home for Christmas for the first time in 23 years.

The 60-year-old Winnipeg grandfather was released on bail Friday from Rockwood Institution, a minimum-security prison north of the city that has been his residence since 1987.

A hairstylist who became a cocaine dealer, Ostrowski has been serving a life sentence for a murder in which he insists he had no involvement.

He was convicted of ordering the 1986 killing of informant Robert Nieman, a fellow drug dealer, in Winnipeg. The Crown said Nieman was killed out of fear he was set to tell police about Ostrowski's cocaine operation.

The conviction was made by a jury largely on the testimony of a man who was facing charges of possessing cocaine.

Charges against that man, Matthew Lovelace, were stayed after Ostrowski was convicted, but Ostrowski's lawyers and the jury members were never told about that secret deal.

Ostrowski's murder conviction is currently under review by the federal Justice Department as a possible wrongful conviction.

Relief for family, supporters

Friday's decision from Queen's Bench Justice Colleen Suche comes with the condition that Ostrowski pay $5,000 for the bail, reside with his daughter, obey a strict curfew except in a medical emergency and have no weapons. He is also ordered to pay two sureties of $25,000 each.

The decision was met with smiles and relief from Ostrowski's family and supporters.

Suche said the arrangement with Lovelace played a great significance in her decision.

"Keeping such evidence from the jury may well have affected … may well have had impact on the fairness of the trial," she said.

That deal with Lovelace allowed him to say things that were known only to the prosecution to not be true, James Lockyer, Ostrowski's lawyer, told Suche during the bail hearing last month. The jury was "totally misled" as a result, he said.

Crown attorney Rick Saull has said it was common practice at the time of Ostrowski's trial to not hand over every police document to the defence. He also said Ostrowski's lawyer at the time had the opportunity to grill Lovelace about any deals.

He had urged Suche during the bail hearing to keep Ostrowski behind bars until the Justice Department was further along in its review of the case.