Megaupload founder Kim Dotcom could be back behind bars within a week.
The Crown is preparing a High Court appeal against the decision to grant the multi-millionaire bail.
Dotcom was granted bail on Wednesday after having it previously denied for posing too great a risk of leaving the country.
However, in his judgement, Judge Nevin Dawson concluded Dotcom was not enough of a flight risk to keep him in custody, and bailed him to his $4.3 million Coatesville property which adjoins the larger mansion where he was arrested last month.
The Crown, acting on behalf of the US Government, will now appeal the decision in the High Court on Tuesday.
Dotcom and three others were arrested in January after police raided his rented mansion in Coatesville, Auckland, at the request of the FBI. Police cut Dotcom out of a safe room he had barricaded himself in.
The German national faces extradition to the United States for his role in megaupload.com, which US Federal prosecutors say has cost copyright holders more than $620 million in revenue lost through pirated material.