The process towards freedom has been a long one.
Close to two weeks ago, Dawson's lawyer Greg Walsh made an application for bail, with Dawson's family offering $1.5 million in security.
Magistrate Robert Williams told the court, “I consider the Crown’s case is not a weak case,” as reported by local media.
Mr Dawson will report to Maroochydore police station daily and he can not travel more than 20 kilometres from his home.
Lynette Dawson vanished in 1982, and Mr Dawson has now been charged with her murder, after years of speculation surrounding the case.
Arrested last week, 70-year-old Dawson has always maintained his innocence.
His family previously claimed Lynette ran away in 1982.