Convicted former media mogul Conrad Black will be released from prison on bond pending the outcome of his appeal, following a favorable U.S. Supreme Court decision on a law used to convict him, an appeals court ruled.

The terms of his bond will be determined by the trial judge, Amy St. Eve of the U.S. District Court in Chicago, according to the brief order issued by an appeals court.

Judge St. Eve needs to set the terms. I am trying to get in front of her to get this done (as soon as possible). Conrad Black's attorney, Miguel Estrada, said.

Black was sentenced in December 2007 to 6-1/2 years in prison on three counts of fraud and one count of obstruction of justice for swindling defunct media holding company Hollinger International Inc. out of $6.1 million.

Black and three colleagues were convicted in a scheme where they paid themselves tax-free bonuses disguised as non-compete fees as they sold off pieces of the Hollinger empire.

The Canadian-born Black, a British peer who once led the world's third-largest newspaper publisher with titles including the Jerusalem Post, Canada's National Post and the Chicago Sun-Times, entered a Florida prison in March 2008.

I am delighted by the ruling, said Ron Safer, an attorney who represented Hollinger's in-house lawyer who was convicted along with Black. I think it's the right ruling and it bodes well for proving in court that this was not a matter of harmless error.

Last month, Black won a victory when the high court limited the reach of the federal fraud law that prosecutors frequently used in corruption cases against government officials and executives like Black and former Enron Corp. Chief Executive Jeffrey Skilling.

It, however, stopped short of overturning their convictions, and sent the cases back to lower courts.

Black's attorneys appealed to the U.S. Court of Appeals in the 7th Circuit, and a three-judge panel agreed he should be granted bond. The appeals court had previously turned down Black's appeals that jury instructions applying the honest services law were improper.

The federal law is applied to fraud cases in which a person is accused of depriving others of the intangible right to honest services. It has been criticized as being too vague and overused.

Prosecutors had argued the obstruction of justice conviction alone -- in which Black was caught on security cameras taking several boxes of documents out of his Toronto offices -- should have kept Black in prison.

(Additional reporting by Nick Carey; Editing by Paul Simao)