Velasquez's bail was set at $1 million. He was ordered to wear a GPS monitor and stay away from the alleged victims. He was seen walking out of the Santa Clara County Jail at 11:56 p.m. Tuesday.
Velasquez, 40, has been behind bars for eight months and had been previously denied bail three times, most recently in July.
He was arrested in San Jose on Feb. 20 after prosecutors said he chased and shot Harry Goularte Jr., who allegedly molested Velasquez's son at a daycare center run by Goularte's mother.
New details emerged in the case during a preliminary hearing for Velasquez Monday.
Police Officer Nathaniel Rodriguez testified Velasquez told him that his son wasn't the only victim of molestation and that other children were also abused at the daycare, according to the East Bay Times.
To date, only one victim is detailed in the criminal charge against Goularte.
Velasquez faces 20 years in prison if found guilty of attempted murder and other firearm-related charges.