The court ruled on his release on Tuesday but following an appeal by the prosecution Hussein was brought to a different court on Thursday. It upheld the earlier decision.
However, it remained unclear exactly when the Qatar-based Egyptian producer will be freed from prison.
Hussein’s lawyer Taher Abul Nasr said his release “is expected to take place within days”.
Az-Zahra Hussein, his daughter, said in a Facebook post her father will be released “with precautionary measures”, and will soon be transferred to a police station from prison.
Gamal Eid, executive director of the Arabic Network for Human Rights Information, said under Egyptian law Hussein must be freed within 24 hours.
“This is a final court ruling but the problem is that security forces tend to delay releases when they do not like those freed,” said Eid, adding in some previous cases the execution of the release order took several months.
The journalist has been in custody since 2016 without formal charges, a trial, or a conviction.
Hussein was accused of “incitement against state institutions and broadcasting false news with the aim of spreading chaos”, allegations he and Al Jazeera Media Network deny.
Nasr told Anadolu news agency the Cairo Criminal Court rejected the prosecutors’ appeal on Thursday.
“This case shows the misuse of pre-trial detention as a form of punishment in Egypt,” said Eid.
He said there are at least 20,000 people currently in detention without charge in Egypt for political reasons. Hundreds of them have already exceeded the legal two-year pre-trial term, he added.
Since the ouster of Muslim Brotherhood president Mohamed Morsi in 2013, Al Jazeera Media Network has been portrayed as Egypt’s national enemy for its coverage of the group. Many of its reporters have been arrested on grounds of spreading lies and supporting “terrorists” – a reference to the outlawed Muslim Brotherhood organisation.