It was determined that Paul McIntyre, 52, of Kinnego Park in Derry, can be released from custody amid delays in the case due to the Covid-19 pandemic.
Ms McKee, 29, was shot as she observed rioting in Derry’s Creggan estate in 2019.
Defence lawyers have argued the evidence is too weak to link him to the killing.
In court on Friday it emerged that a hearing to determine if Mr McIntyre is to stand trial has been put back to September because of the effects of the pandemic and the High Court judge suggested that date could also be in jeopardy.
He confirmed that Mr McIntyre is to be released on strict conditions.The accused is to live under curfew in Derry and must report to the PSNI on a daily basis.
Mr McIntyre is also barred from going within 500 metres of any march, protest or police operation, and cannot have dealings with the dissident republican political party Saoradh.
The judge said: “This decision is not taken lightly and is not to be taken as any reflection on the strengths or weaknesses of the prosecution case.”