A judge ordered that Mark Marek, who operates bestgore.com, be released from the Edmonton Remand Centre on Thursday on $7,500 cash bail.
Police charged Marek on Tuesday with one count of corrupting morals, a rarely used offence in the Criminal Code.
Marek, 38, appeared in court on a closed-circuit TV screen and tried to talk about his website. Provincial court Judge Elizabeth Johnson cut him off, explaining that she only wanted to hear information about whether he is a flight risk.
A limited publication ban was issued covering details about the video, entitled "1 Lunatic 1 Ice Pick.''
It was posted on the website a year ago and allegedly shows the killing and dismemberment of Chinese university student Jun Lin in Montreal. Parts of Lin's body were mailed across Canada in a crime that made headlines around the world.
Magnotta, a former porn actor and stripper, was the focus of an international manhunt and was arrested in June 2012 in Berlin. He has pleaded not guilty to murder and is to stand trial in September 2014.
Police allege that Magnotta sent Marek the video and Marek posted it online while knowing that it depicted a real killing.
Officers said they started investigating Marek after the video was posted but had no evidence to warrant an arrest.
He flew to Hong Kong in February. When he arrived from the Philippines at the Vancouver airport last week, border officials seized computer equipment he was carrying. He was allowed to continue his flight to Edmonton and then agreed to be interviewed by police.
Crown prosecutor Julie Roy opposed Marek's bail. She said he has no Edmonton address and he had made it clear to police that he planned to go back to his native Slovakia. Police have said he has been living out of his car since he returned to the city.
Marek, a pale man with a shaved head, told the judge that officers have already seized his Canadian passport and he is no longer considered a citizen of Slovakia. "I only have one passport," he said with a thick accent.
Defence counsel Guy Doyon said Marek had earlier planned to visit family in Slovakia in September but doesn't intend to run away from his legal problems.
"This is not someone who has flight on his mind. He wants to vigorously defend his actions here."
Roy also told court that Marek went to a bank after his interview with police. A short time later, he was arrested carrying $18,000 cash.
Doyon said Marek posted the video with a disclaimer: "Is this real? It seems fake."
"He posted it in the public interest to determine if an offence had been committed here," Doyon told the judge.
Doyon said, and police agree, that Marek took the video off the site after about eight days.
The defence argued that the website is Marek's only source of income — "his livelihood." But the judge agreed with the Crown that he should no longer be allowed to operate it.
As part of his bail conditions, the judge ruled Marek may not use the Internet, attend an Internet cafe or have a cellphone or any electronic device that can send or receive messages and gain access to the web.
Doyon told court that keeping Marek off the Internet won't clean up cyberspace.
"It's the Internet. You can find anything you want on the Internet. With Mr. Marek not being there, that's not going to stop."
A Quebec special effects artist was found not guilty last December on a charge of corrupting morals. Remy Couture argued that pictures and videos on his website depicting gory — but fake — scenes of murder, torture and sex with young women were art.
He said he wanted to highlight his skills as a special effects artist.
His trail heard how Interpol received a complaint in 2006 from a website user in Austria. The website's scenes were deemed so realistic that a pathologist couldn't rule out that someone had actually been killed.
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