Svensson, now 34, has been living on her own under restricted conditions, should be freed without restrictions, the administrative court in Linköping ruled on Wednesday.
Knutby, a village near Uppsala, became notorious across Sweden when Alexandra Fossmo, wife of Helge Fossmo, a pastor in the local Pentecostal church, was found murdered in the early hours of January 10th 2004.
Her neighbour, 30-year-old Daniel Linde, whose wife was also having an affair with the sex-crazed pastor, was also shot and seriously injured.
The then 26-year-old Svensson, who had previously been employed as a nanny to the Fossmos, confessed to the killing.
Helge Fossmo was later charged with the murder of his first wife, Héléne Fossmo, who was found dead in her bathtub in 1999.
In July 2004, he was convicted and sentenced to life imprisonment for conspiracy to commit murder and attempted murder in relation to Svensson’s killing of his second wife, but was acquitted on charges relating to the death of his first wife.
The prosecutor in the case, which captivated Sweden for the better part of a year, had no objections to Wednesday’s ruling.
The psychiatrist brought in to serve as an expert witness in the case also agreed that Svensson no longer needs institutional care.
“The criteria are simple. There is no risk for a relapse and institutional care isn’t required because of her personal and psychological condition,” lay judge Owe Horned, who ruled on the case, told the TT news agency.
He added that the fact that the Knutby case received so much attention didn’t factor in the court’s decision.
“And she thinks she can handle the media interest,” said Horned.
According to the court, the risk that Svensson will commit another crime is minimal and she no longer suffers from serious psychological problems like she did in 2004.
“Helge’s word was my law. By the grace of God I got to be his slave,” nanny Sara Svensson said in court in May 2004.
Fossmo had explained to her that God had made an exception for him from the commandment forbidding adultery.
His anonymous text messages were like a command from God, Svensson said at the time.
In issuing the ruling, the court took into account that Svensson now lives on her own in an apartment, studies, works and has “an established social network”.