Khan, who was convicted of terrorist offenses, fatally stabbed Cambridge graduates Jack Merritt, 25, and Saskia Jones, 23, and injured three other people before running across London Bridge.
Carrying two large knives and a fake suicide belt, he was held on deck by three men, including Steven Gallant – a convicted murderer who was at large by day that day.
Khan was then shot dead by police.
A parole board spokesperson said: “We can confirm that a parole board panel ordered the release of Steven Gallant following an oral hearing.
“A panel will carefully examine a wide range of evidence, including details of the original crime and any evidence of behavior change, as well as explore the damage done and the impact the crime had on victims. “
The release decision is provisional for 21 days subject to any appeal by the Minister of Justice.
In 2005, Mr. Gallant was jailed for life with a minimum sentence of 17 years for the murder of a firefighter in Hull.
His actions on the day of the London Bridge terror attack saw his sentence reduced following intervention by the Queen.
Mr. Gallant took Khan as the last carried out a massacre armed with two knives and a fake suicide vest on November 29.
He had been a serving prisoner who had been released on license for the day to participate in the nearby Learning Together rehabilitation project.
He said previously that he had heard noises and went to investigate, challenging “orders to stay in the conference room.”
“I could tell something was wrong and I had to help. I saw people injured. Khan was standing in the hall with two big knives in his hands, ”he added.
Mr. Gallant used a narwhal chair and tusk given to him by official Darryn Frost, who also risked his life to confront Khan.
“Khan also showed us the bomb around his waist in an attempt to scare us,” he said.
“We then chased him across London Bridge and detained him until the police arrived. “
Khan was shot dead by police, but not before killing Jack Merritt and Saskia Jones, coordinators of the rehab course.
Of its decision, the Parole Board said: “After reviewing the circumstances of his index offense, his history of offenses, the progress made during his detention, the details of the release plan and all the evidence. presented at the hearing, the panel was satisfied that Mr. Gallant was fit for release.
The terms of Mr Gallant’s licensed release would include a curfew, staying at a designated address and observing an exclusion zone to avoid contact with his victim’s family.