A two-judge panel of the Supreme Court of Pakistan granted bail after ruling there was insufficient evidence the former president was involved in the 2006 death of Nawab Akbar Khan Bugti, Dawn News reported.
Bugti led a rebel effort to gain greater autonomy for Baluchistan province and greater revenue from the province's resources.
Musharraf was ordered to pay two bonds of $16,000 each.
He had appealed an earlier rejection of bond by the Baluchistan High Court.
Prosecutors had sought to continue Musharraf's house arrest, with Tahir Iqbal Khattak, the prosecutor general of Baluchistan, noting the former president was accused of "being part of a criminal conspiracy."
Musharraf was Pakistan's leader at the time of the attacks, he said, displaying an image of Bugti's home after an attack.
The justices rejected Khattak's argument, saying there was insufficient evidence to implicate Musharraf in Bugti's death.
Musharraf has been granted bail in two other cases involving the death of former prime minister Benazir Bhutto and the detention of judges.