The Scottish-registered scallop dredger Cornelis Gert Jan left the northern French port of Le Havre on Wednesday evening.
The trawler's owner, Macduff Shellfish, said it was "delighted" that the crew and vessel could return home.
French authorities held the boat last week, saying it did not have a licence.
Menna Rawlings, the UK's ambassador to France, welcomed the news, tweeting: "Glad to hear the Cornelis is free to leave Le Havre and that the Brits on board are on their way home tonight."
The dispute over post-Brexit fishing licences flared up last month, after the UK and Jersey denied fishing permits to several French boats.
France then threatened a series of measures against the UK unless more licences were granted by 2 November.
But French President Emmanuel Macron suspended the threats at the 11th hour ahead of more talks between UK and French ministers on Thursday.
Earlier, the trawler's skipper Jondy Ward told the BBC they had been "caught in the middle" of the political row.
Mr Ward still faces trial in France next August regardless of Wednesday's court ruling that the boat can be released.
He has been charged with illegal fishing without a licence in French waters - but the case could be dropped before it reaches trial.
Andrew Brown, the public affairs director of Macduff Shellfish, said the crew were in good spirits, looking forward to returning to their loved ones and grateful for all the messages of support.
No bail bond was needed to release the trawler, he said.
It comes after Mr Ward's lawyer said the French authorities had demanded a bond of 150,000 euros (£127,000), which he argued was excessive given the total value of the produce on board was around 5,000 euros (£4,200).
In short, it's about how many French fishing boats can catch fish in UK waters.
Under the Brexit trade deal, the EU and UK agreed they would give licences to boats if they can show they have fished in each other's waters for years.
But there have been disagreements about how much evidence is needed.
Big trawlers will routinely collect this information automatically.
But smaller vessels that come from French harbours to fish around the Channel Islands, for example, can find it harder to provide the proof needed.
Downing Street acknowledged that France could reimpose its threats as Brexit minister Lord Frost prepared to hold talks with France's Europe minister Clement Beaune on Thursday.
The prime minister's official spokesman said: "It's entirely up to the French government if they want to reimpose the threats that we saw they both announced and stood back from in recent days."