Mr Doherty said she was initially remanded in custody at Maghaberry before proceedings were brought earlier this week to secure the prison switch.
With Ms James seeking permission to return to her home address, Mr Doherty insisted it would be disproportionate to keep her in custody on the charges.
Mr Justice Shaw agreed to release her on bail under a strict order not to contact the complainant.
Speaking outside the court, Ms James’ solicitor Joseph Mulholland said the policy gap on transgender people in custody “has caused unnecessary delays and distress”.
“It is imperative that this policy vacuum is addressed as a matter of urgency to ensure fair and appropriate treatment for all.”
BBC News NI has contacted the Department of Justice for comment.
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