62-year-old Strauss-Kahn would be detained at home ringed by armed guards and has been told to surrender all travel documents.
The New York Supreme Court Judge Michael J Obus asked him to pay an additional bond of USD 5 million as he acknowledged that there is "a serious risk" that Strauss-Kahn could attempt to flee.
Strauss-Kahn, who has claimed innocence, was locked up in a New York prison since Saturday when he was bundled out of a Paris-bound flight and taken into custody on charges of sexually assaulting a chambermaid at Sofitel hotel in Manhattan.
Strauss-Kahn has been charged with a criminal sex act, attempted rape and unlawful imprisonment.
He allegedly forced the maid, who is a native of Guinea, to perform oral sex and submit to anal sex.
"I expect that you will be here" for court, Obus said, addressing Strauss-Kahn directly.
"I do want to make it very clear: If there is the slightest problem with your compliance," court officials would quickly alter the bail agreement."
Strauss-Kahn looked tired as he sat in court wearing a blue shirt and gray jacket without a tie. His wife, Anne Sinclair, a French TV journalist, was present in court along with their daughter.
Earlier, a grand jury indicted Strauss-Kahn on all seven charges he faced after his arrest on May 16, including four felony counts and three misdemeanors.
"These are extremely serious charges, based on the grand jury's determination that the evidence supports the commission of non-consensual, forced sexual acts," Manhattan district attorney Cyrus R Vance Jr said after the bail hearing.
Strauss-Kahn is allowed to stay with his wife in the apartment.
On June 6, the court will hold an arraignment hearing in which the exact charges will be revealed.
Strauss-Kahn, however, has to spend one more night at the Rikers Island prison where he being held since Monday.
Prosecutors had cited the example of film director Roman Polanski, who fled from the US in 1977 after admitting to engage in unlawful sex with a minor. Strauss-Kahn, however, has given up his extradition rights, which he is granted as a French citizen.
Strauss-Kahn is expected to plead not guilty. His lawyers have also said that the sex was consensual.
Yesterday, Strauss-Kahn resigned from the IMF.
"It is with infinite sadness that I feel compelled today to present to the Executive Board my resignation from my post of Managing Director of the IMF," Strauss-Kahn wrote to the Washington-based IMF board.
"Dominique Strauss-Kahn has today informed the Executive Board of the International Monetary Fund (IMF) of his intention to resign as Managing Director with immediate effect," the IMF said in a statement after it received a formal letter in this regard from Strauss-Kahn.
Strauss-Kahn, a socialist politician, was seen as a possible contender in the 2012 presidential elections in French.
