WikiLeaks founder Julian Assange has been freed from custody, just a few hours after a judge in London ruled he should be released on bail.

Assange is free while he fights extradition to Sweden to face sexual assault allegations.

WikiLeaks founder Julian Assange holds up a court document for the media outside the High Court in London on Thursday after he was released on bail. (Kirsty Wigglesworth/Associated Press)

"Well, it's great to smell the fresh air of London again," Assange said Thursday as he thanked his supporters, backers and legal team from the steps of the High Court.

He said he hoped to continue his work and continue "to protest my innocence in this matter and to reveal, as we get it … the evidence from these allegations."

Assange did not take questions after his statement.

Earlier, Judge Duncan Ouseley rejected a prosecution appeal of a lower-court decision from earlier this week that granted Assange his freedom and set conditions on his release.

Prosecutors tried to argue that Assange was a flight risk prior to his extradition hearing in January, but Ouseley disagreed.

"He would diminish himself in the eyes of many of his supporters," Ouseley said of Assange in court.

"I don't accept that Mr. Assange has an incentive not to attend [court]. He clearly does have some desire to clear his name."

Assange smiled and gave a thumbs-up to the packed courtroom as he was led out following the judge's ruling.

Following the ruling, Assange's mother, Christine, thanked supporters of her son and said she was "very, very happy."

Denies allegations

Last month, WikiLeaks deeply angered U.S. officials by beginning to publish its trove of 250,000 secret U.S. diplomatic cables, and Assange's supporters suspect the sexual assault claims are politically motivated — a charge Sweden denies.

Ellingham Hall in Bungay, England, the home of journalist and Frontline Club founding member Vaughan Smith, is seen from the air, on Wednesday. (Matt Dunham/Associated Press)

The 39-year-old Australian was arrested in Britain on Dec. 7 on an arrest warrant issued by Sweden, where two women allege they were sexually assaulted by the founder of the whistleblowing website. Assange has denied the allegations.

He was granted bail earlier this week. However, British prosecutors appealed the granting of bail, on Sweden's behalf, and Assange was kept behind bars.

Assange's bail conditions stipulate that a guarantee of £240,000 ($376,000 Cdn) be paid.

He will have to live at Ellingham Hall, a 10-bedroom mansion on the 240-hectare country estate of supporter Vaughan Smith in Suffolk County in eastern England. Assange must also wear a security tag, check in daily with police and be subject to a curfew.

A WikiLeaks spokesman said Assange would be able to take advantage of the fast internet connection at Ellingham Hall to resume his work on the website.

With files from The Associated Press