Tehran ? Iranian judicial authorities on Sunday said they would free an American woman on $500,000 bail after earlier scuttling a government-organized release ceremony that had been set for Saturday.

Sarah Shourd, 32, one of three Americans being held here on charges of illegal entry and spying, will be released and will be free to leave the country once the bail money is paid, Tehran prosecutor Abbas Jafari Dolatabadi told Iranian media. He said Shourd is sick, which led to the decision to free her.

“Based on reports and the approval of the relevant judge about the sickness of Ms. Shourd, her detention was converted to $500,000 bail, and if the bail is deposited, she can be released,” the official Islamic Republic News Agency quoted Dolatabadi as saying.

Shourd’s mother has said her daughter has been denied treatment for serious health problems, including a lump in her breast and precancerous cervical cells.

The reversal by prosecutors comes after what appeared to be a struggle between the government and Iran’s independent judiciary. The initial decision to cancel Shourd’s release had been seen as an embarrassment for President Mahmoud Ahma-dinejad, who had intervened to arrange for Shourd to go free in what was billed as a gesture of goodwill for the Muslim holiday of Eid al-Fitr at the end of Ramadan.

The bail is likely to be arranged through the U.S.-interests section of the Swiss Embassy, since the United States does not have an embassy of its own in Tehran. Iranian law does not prevent suspects from leaving the country during their bail period. There has been no announcement on when Shourd will be freed, but her attorney said it would not be longer than a couple of days.

“She could be freed within two or three days. I am now waiting for the embassy to confirm the bail money is ready,” said Masoud Shafii, the attorney.