(CNN) -- Swiss authorities will not fight to keep Oscar-winning director Roman Polanski in jail while he battles extradition to the United States on a sex charge, they said Thursday.
A Swiss judge ruled Wednesday Polanski could be transferred to house arrest if he posts bail of 4.5 million Swiss francs ($4.5 million). The Swiss Federal Office of Justice could have appealed the decision.
The filmmaker was arrested in Switzerland in September on a U.S. arrest warrant stemming from a 1977 sex case.
Wednesday's decision to grant him bail reverses an earlier court decision.
Last month, the Swiss Criminal Court refused Polanski's request to be released on bail and said the director posed a high flight risk, according to court documents.
The Swiss Criminal Court said measures such as revoking Polanski's travel documents and requiring him to report daily to the police would not reduce the possibility that the director would flee.
Polanski, 76, pleaded guilty in August 1977 to having unlawful sex with a 13-year-old girl five months earlier. He was 43 at the time.
Los Angeles, California, prosecutors dropped other charges in exchange for his guilty plea.
But Polanski fled the country before he was sentenced, after he learned the judge might not go along with the short jail term he expected to get from the plea agreement.
Polanski remained free -- mostly living in France -- before he was arrested in Switzerland on a 31-year-old arrest warrant. Los Angeles authorities said they sought his arrest when they learned he would be traveling to Switzerland for a film festival in September.
Polanski agreed to pay his sexual assault victim $500,000 to settle a damage claim she filed against him nearly 12 years after the crime, according to court papers released October 2.
Polanski still owed the money -- plus another $100,000 in interest -- three years after the 1993 settlement, according to the documents.
The victim sought money for damages suffered when Polanski had sex with her. She claimed Polanski plied her with alcohol and quaaludes during a photo shoot at the Hollywood Hills home of actor Jack Nicholson.
It's not clear if Polanski ever completed paying the debt to the woman, although the court papers document efforts by her lawyers to garnish residuals and other payments owed to Polanski by the Screen Actors Guild, movie studios and other Hollywood businesses.
The victim came forward long ago and made her identity public -- saying she was disturbed by how the criminal case had been handled. Samantha Geimer, now 45 and a married mother of three, called in January for the case to be tossed out.
Polanski's arrest has divided public opinion, even in Hollywood. Some high-profile filmmakers, such as Woody Allen, Martin Scorsese and Pedro Almodovar, have called for his release. Others, including actors Kirstie Alley and Paul Petersen, refuse to defend him.
"JUST FOR THE RECORD....RAPE IS RAPE...this is one HOLLYWOOD STAR who does not CELEBRATE or DEFEND Roman Polanski..his ART did not RAPE her," Alley wrote on Twitter.
Petersen, a former child actor and president of A Minor Consideration, which advocates on behalf of young performers, said was shocked Polanski's colleagues were taking his side.
"I can't believe that Hollywood has separated itself so completely from American morality," Petersen said. "It is yet another case of Hollywood being out of sync with most of America."
Polanski won an Academy Award for Best Director in 2003 for "The Pianist." He was nominated for a best director Oscar for "Tess" and "Chinatown," and for best writing for "Rosemary's Baby," which he also directed.
CNN's Sarah Sultoon in London, England, contributed to this report.