8:32 AM PT -- According to court docs obtained by TMZ Sports ... Telfair was released on $500,000 bail.
As part of his agreement with the court, Telfair must surrender his passports and remain in New York City.
Telfair also agreed to be confined to house arrest from 7 PM to 7 AM daily while also wearing an electronic monitoring ankle bracelet.
Sebastian Telfair is FREEEEEEEEEEEE!!!!
... for now.
The ex-NBA star and former H.S. prodigy is out of prison just days after he was sentenced to 3.5 years in his gun case ... but there's a chance Telfair could end up back behind bars.
Here's the deal ... 34-year-old Telfair was convicted of possessing an illegal firearm stemming from a June 2017 incident where he was caught with an arsenal of weapons during a traffic stop.
He was facing up to 15 YEARS in prison for the crime ... but instead, on Aug. 12, a judge ordered him to serve 3.5 years.
Telfair and his legal team appealed the sentence ... and asked that while the process plays out, they let Telfair bail out of prison.
TMZ Sports has learned a judge agreed to those terms Thursday -- with an ankle monitor clearly a part of the deal -- and Telfair is now a free man.
Unclear how much Telfair's bail was -- we're working on it ... but we do know he was spotted with friends on Thursday.
Telfair -- who famously appeared on Sports Illustrated's cover as a high schooler -- played for several teams in the NBA from 2004 to 2015. He was a Trail Blazer's 1st-round pick in the '04 NBA Draft.
Originally Published -- 7:47 AM PT