Dr Patel, a US citizen now, arrived in Brisbane on a Qantas flight from Los Angeles accompanied by two Queensland police officers, having been in custody in his home city of Portland, Oregon, since March.
The 58-year-old Patel faces 13 charges including manslaughter, grievous bodily harm and fraud, relating to his time at Bundaberg Base Hospital in southern Queensland between 2003 and 2005.
Magistrate Brian Hine agreed to grant bail to Dr Patel, after considering a request by his legal team.
The magistrate ordered Dr Patel provide a $20,000 cash surety.
Dr Patel will also have to live at a place approved by the Director of Public Prosecutions, report to police three days a week and not leave Queensland or approach an international airport.
He will surrender his passport and cannot communicate with witnesses.
In granting bail, Hine said he had taken into account the fact that it would take at least 12 months for the case to reach trial and that Patel had returned to Australia from the US voluntarily.
Queensland Director of Public Prosecutions Tony Moynihan had opposed bail, arguing Dr Patel's voluntary return to Queensland only demonstrated a recognition that extradition was inevitable.
Dr Patel's defence lawyer Michael Byrne SC argued his client was not a flight risk and bail should be granted.
Besides the committal hearing was "highly unlikely'' to proceed this year because the brief consisted of more than 100 volumes of material, he said.
He also told the court that a trial would be unlikely to take place before the second half of next year.
Dr Patel's wife intended to travel to Australia in the near future to be with her husband, it is expected.
The arrival of Qantas flight 176 in Brisbane Monday morning heralded the start of one of Queensland's highest profile court cases in recent times.
Patel's case is probably the worst medical-negligence scandal in this country. He allegedly falsified his application to practise medicine in Australia and then falsified death certificates and refused patients' transfers to other hospitals to cover up "botched treatment and surgery".
Welcoming Patel's return to Queensland, Federal Home Affairs Minister Bob Debus told the Australian Broadcasting Corporation (ABC) that it shows the importance of international cooperation in making sure people cannot evade justice by crossing borders.
The families of former patients of Patel have heaved a sigh of relief over his extradition.
"Obviously the fact that he has arrived back here has been a huge weight lifted. We always kept the faith. We always knew it was going to happen. We never wavered in that faith even through all of the hiccups we have had, so we've always been very positive that that would be the end result," Bundaberg Hospital Patients Support Group spokeswoman Beryl Crosby told AAP.
But Queensland Premier Anna Bligh cautioned, "I think people would understand that there are very serious charges, there will be many times when this matter will come before the courts before we see a formal committal hearing and beyond that a full trial,"