Australia's most decorated soldier, Ben Roberts-Smith, has been granted bail over war crimes allegations.

The Victoria Cross recipient and former corporal in Australia's Special Air Service (SAS) Regiment was taken into custody last week, charged with five counts of the war crime of murder.

Investigators allege the 47-year-old was involved in the deaths of several unarmed Afghan detainees, either by killing them or ordering a subordinate to do so, between 2009 and 2012.

On Friday, lawyers for Roberts-Smith - who denies the claims and appeared via video link - argued the "unprecedented" case will face long delays and ongoing imprisonment would prevent him being able to properly mount a defence.

Judge Greg Grogan agreed Roberts-Smith's case was exceptional, and imposed bail conditions which he said would address prosecutors' concerns about the potential flight risk or any interference with witnesses or evidence.