Saakashvili told journalists after the hearing that he planned to continue his political activities with the aim of "constitutional, calm, but very necessary transfer of power in the country," accusing the Ukrainian authorities of corruption and "usurping power."
But he said he "has no presidential ambitions" himself.
Judge Larysa Tsokol told Kyiv's Pechera district court that the prosecutors' request to put Saakashvili under house arrest pending trial was "dismissed," prompting applause by Saakashvili's supporters in the courtroom.
Saakashvili praised the judge's ruling as "courageous," and said, "It means not everything is lost in Ukraine."
Ukrainian Prosecutor General Yuriy Lutsenko later said on ICTV that he will appeal the judge's ruling, Russian news agency TASS reported.
Meanwhile, Reuters reported that Ukraine's Justice Ministry is also still weighing an extradition request from Georgia for the former Georgian president to face criminal charges related to his years in power there.
Saakashvili has dismissed the charges against him in both countries as trumped up.
"I don't consider myself a detainee, I consider myself a prisoner of war," he told journalists before the December 11 hearing.
The court was packed with journalists and lawmakers as the custody hearing for Saakashvili, who is also an ex-governor of Ukraine's Odesa region, which dragged on late into the evening of December 11.
A crowd of about 200 Saakashvili supporters earlier scuffled with police outside.
Saakashvili was detained late on December 8, after an initial attempt to place him in custody failed on December 5 when supporters crowded around a police vehicle where he was being held after a raid on his apartment and freed him. On December 9, prosecutors said they would ask a court to place him under house arrest with electronic monitoring pending trial.
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