Turcotte, the ex-cardiologist who faces a new trial on murder charges after he stabbed his two children to death in 2009, was granted conditional bail in September.
However, prosecutors had asked that he remain in custody until his new trial.
Lawyers for the Crown argued his release reduces public confidence in the justice system.
The Crown prosecutor's office says it respects the court's decision but lawyers will take the time to analyze the decision.
They have 60 days to do so before deciding if they will appeal to the Supreme Court of Canada.
Turcotte's new trial will begin in 2015.