Judge Christina Forsner set five conditions for Zagorec's provisional release - not to flee, to stay at his Austrian address, to report any change in his whereabouts to the court, to hand in his passport and to pay bail of one million euros.
After all these conditions are met, Zagorac will be released pending trial, otherwise he is to remain in custody. A new hearing is scheduled for 27 March.
Should bail be paid today, Zagorec will be released, spokesman Gneist said.
The retired general objected his extradition to Croatia, which means that the process could last until all necessary documentation is collected from the Croatian Justice Ministry. Gneist said that Zagorec was not a flight risk.
Zagorec was arrested on Tuesday evening on an international warrant issued by the Croatian judiciary.
The retired general is suspected of abuse of office, namely that in 2000 he took from a Defence Ministry safe jewels he had received from a German arms dealer in 1993 as collateral for five million US dollars from the Croatian Defence Ministry intended for the purchase of weapons for Croatia's defence.