CAIRO - Egyptian leader Hosni Mubarak will leave jail as early as Thursday after a court ruling that jolted a divided nation already in turmoil seven weeks after the army toppled Islamist President Mohamed Morsi.

Egypt's ousted President Hosni Mubarak sits inside a dock at the police academy on the outskirts of Cairo in this April 15, 2013 file photo. [Photo/Agencies]

Mubarak will then be put under house arrest, the prime minister's office said in a statement. The decision was authorised under Egypt's Emergency Law recently enacted under a security crackdown on Islamists, it added.

By keeping Mubarak under house arrest, Egyptian leaders may be trying to show they will not be too lenient with him to avoid angering the many Egyptians who held mass protests that led to the end of his iron rule in 2011.

Two groups of activists have already called for sit-ins in Cairo to protest against his expected release.

Convening on Wednesday at the Cairo jail where Mubarak is held, the court ordered the release of the military man who ruled Egypt for 30 years until he was overthrown during the uprisings that swept the Arab world in early 2011.

Asked when his client would go free, Mubarak's lawyer, Fareed al-Deeb, told Reuters: "Maybe tomorrow".

Mubarak, 85, was sentenced to life in prison last year for failing to prevent the killing of demonstrators. But a court accepted his appeal earlier this year and ordered a retrial.

The ailing ex-president probably has no political future, but some Egyptians were indignant at the court ruling, which state prosecutor Ahmed el-Bahrawi said cannot be appealed.

"The army has brought back Mubarak's regime, the same regime," said Guma Abdel Alim, outside a bicycle shop in central Cairo. "Those who were elected by the people are now in prison."

He was referring to a widescale security sweep on Morsi's Muslim Brotherhood that has netted many of its leaders.

Shopworker Rubi Abdel Azim said Mubarak had been the worst ruler in Egypt's history, but a passerby in a worn-out shirt disagreed. "He was the greatest president," said Nagi Hassan.

Political turbulence has kept Egypt on edge for months. At least 900 people, including 100 soldiers and police, have been killed in a crackdown on Morsi supporters in the past week, making it the country's bloodiest internal episode in decades.

Mubarak's release could add to tensions in a country where the Muslim Brotherhood has accused the army of trying to bring back the old regime.

"Today there was a decision to release him. Naturally that will cause a backlash in large segments in the Egyptian street," said analyst Adel Soliman.