"She will go home tonight," her personal physician Tin Myo Win told reporters on Friday. "She will go home but will still be effectively under house arrest. This has been communicated to me by the authorities concerned."
Aung San Suu Kyi, who has spent seven and a half years under house arrest since taking up the pro-democracy cause in 1988, was arrested on 30 May after clashes between her supporters and a pro-junta gang.
Since then she has been held in detention at a secret location but was admitted to a private hospital in Yangon on 17 September for a major operation.
In a statement read out by the doctor, the 58-year-old Nobel peace laureate thanked her supporters who have maintained a vigil outside the private hospital where she was treated for gynaecological and other unspecified conditions.
"I ask specifically that nobody should want to see me leave the hospital. Anybody who wishes to see me once I am home should make arrangements through the authorities," she said in her first public comments for four months.
"I thank you for your warm concern, and am confident that you have equal concern for my supporters," she said, referring to the other leaders of her National League for Democracy (NLD) who are also under detention.
Observers said the statement appeared to reflect an agreement with the junta that her supporters would disperse peacefully when she is discharged, probably under the cover of darkness.
"They don't want her getting out the front door and getting into a car, anything that could cause any trouble," said one Western diplomat.
"If they think they're going to get plaudits from the western community they're not going to. The hardliners will say it's not enough, she should be released completely and no restrictions placed on her"
While there was relief that the 58-year-old opposition leader is being returned to the comparative comfort of her home, the move is unlikely to impress the regime's critics led by the United States and the European Union who have tightened sanctions since she was taken into custody.
"If they think they're going to get plaudits from the western community they're not going to. The hardliners will say it's not enough, she should be released completely and no restrictions placed on her," the diplomat said.
"It's such a logical thing to do, it couldn't be more obvious if they were hit in the face with it. A perfect opportunity has been presented to them to do the right thing," he said, referring to intense pressure for a release.
Aung San Suu Kyi's first stint under house arrest began in 1989 and lasted six years, while the second ended in May 2002 amid optimism that the junta was intending to embark on democratic reforms.
Few observers were willing to speculate Friday on how long the latest detention could last, but said that next week's visit by United Nations envoy to Myanmar Razali Ismail would be critical to her future.
Razali, who brokered landmark talks between the junta and the opposition leader in October 2000, is expected to push the ruling generals to implement a new "roadmap" for reform which they unveiled last month.
Security at Aung San Suu Kyi's home in University Drive was extremely tight Friday, with military intelligence agents blocking access to the road to all but residents.
During times of political tension, the road is cordoned off with barbed-wire barricades to prevent people passing by the famous whitewashed villa.