Lawyers for Pistorius had argued he should have been allowed out in August after serving a sixth of his sentence for killing model and law graduate Reeva Steenkamp on Valentine's Day 2013.
But he remained behind bars after Justice Minister Michael Masutha made a last-minute intervention and the case was referred for review.
Steenkamp’s parents say Pistorius killed their daughter on purpose and have contested any parole.
“They are not surprised at all – it was expected,” Tania Koen, a lawyer acting on behalf of Steenkamp family, told AFP after speaking to June and Barry Steenkamp yesterday.
“But it doesn’t change anything in their lives. Their daughter is still not coming back.
“Whether Pistorius is incarcerated or released on parole, their daughter is still gone.”
After meeting last week, the parole board said it wanted to consult with Steenkamp’s family over Pistorius’s possible release.
An official statement from the department of correctional services said the parole board “approved the placement of offender Oscar Pistorius under correctional supervision” from Tuesday (Oct 20).
“The parole board considered all submissions, including the offender’s profile report, the directives of the Parole Review Board and the submission of the victim’s family.”
It gave no details about Pistorius’ parole conditions except that they included “continued psychotherapy” and firearms restrictions.
Legal experts said the decision entailed house arrest, with severe restrictions on his movement. He may have to wear a tracking tag and report regularly to a local police station.
Pistorius’s family had accused officials of bowing to “political and media hype” in denying him parole.
“I do think correctional services have probably considered how unfairly he has been treated. He should have been released on August 21,” Brian Webber, a lawyer representing Pistorius, told AFP last week.
In a trial that made headlines around the world, Pistorius, now 28, was jailed last year for killing Steenkamp.
He was found guilty of culpable homicide – a charge equivalent to manslaughter – after saying he shot her through a locked bathroom door because he mistook her for an intruder.
After his release, Pistorius will face a further test on November 3 when prosecutors appeal to South Africa’s Supreme Court for a murder conviction and a tougher sentence.
Pistorius, who sold his houses to pay legal bills, has lost his lucrative sponsorship contracts and has no immediate hope of salvaging his athletic career whatever the outcome of the appeal.
He may serve his house arrest at his wealthy uncle’s house – a mansion in a upmarket Pretoria suburb – though he could also request to stay in a different location to try to evade the glare of the media.
In a bizarre twist this week, two South African men who rent the house where Pistorius shot dead Steenkamp appeared in a video showing off the bathroom where the crime took place.