The Higher Regional Court in northern Schleswig city ruled that Spain’s extradition request based on charges of “corruption” was admissible, and said it would seek more information on these accusations.
But the court ruled out Puigdemont’s extradition based on charges of “rebellion”, highlighting that it was not compatible with the German law.
It ordered the release of former Catalan leader on bail at €75,000 ($91,786).
The separatist leader was arrested in late March in northern Germany, while he was traveling from Denmark to Belgium.
A Spanish court issued earlier a European arrest warrant against him on charges of sedition, rebellion and misuse of public funds.
The 55-year-old politician led a parliamentary session last year that saw separatist lawmakers vote for the region of Catalonia to declare independence from Spain.
He and 12 other separatist leaders were officially charged with rebellion.
Since October, Puigdemont had been living in Belgium.
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