Former head of International Monetary Fund (IMF) Dominique Strauss-Kahn (C) and his wife Anne Sinclair (L) leave New York State Supreme Court in New York, the United States, July 1, 2011. Prosecutors agreed on Friday to release Strauss-Kahn on his own recognizance. In a brief hearing at State Supreme Court in Manhattan, the judge freed Strauss-Kahn from house arrest. Prosecutors acknowledged that there were significant credibility issues with the hotel housekeeper who accused Strauss-Kahn of trying to rape her in May in a Manhattan hotel room. (Xinhua/Shen Hong)?

Prosecutors agreed on Friday to release the former head of International Monetary Fund (IMF), Dominique Strauss-Kahn, on his own recognizance.

In a brief hearing at State Supreme Court in Manhattan, the judge freed Strauss-Kahn from house arrest. Prosecutors acknowledged that there were significant credibility issues with the hotel housekeeper who accused Strauss-Kahn of trying to rape her in May in a Manhattan hotel room

"I understand that the circumstances of this case have changed substantially and I agree the risk that he would not be here has receded quite a bit," Justice Michael Obus told the court. "I release Mr. Strauss-Kahn at his own recognizance."

The office of New York City District Attorney Cyrus Vance agreed that the French politician's 1-million-U.S. dollar bail be returned, but the charges against him have not been dropped, and he will not be allowed to leave the United States. His passport remains in the possession of authorities. The next hearing is July 18.

"Our prosecutors will continue their investigation until we have uncovered all the relevant facts," Cyrus Vance told the press in front of the court. "We believe we have done nothing but to support the alleged victim."

Strauss-Kahn was required to post a 1-million-U.S. dollar bail and a 5-million-dollar bond in the wake of the housekeeper's accusations. He has remained under 24-hour home confinement while wearing an ankle monitor.

The release marks a stunning change of fortune for Strauss-Kahn, who was considered as a leading candidate for the French presidency before the sexual assault case emerged and made international headlines last month, leading to his resignation as the IMF's managing director.

On Tuesday, French Finance Minister Christine Lagarde was chosen by the IMF Executive Board as Strauss-Kahn's successor, becoming the first woman to take the IMF's top job since its inception in 1944.