Having spent around half of a 30-year sentence behind bars all told, the court in western Mons ruled that Michelle Martin, 52, be sent to a different part of the country and was ordered by the court to "keep her distance" from relatives of victims.
After victims' families and politicians expressed their anger, state prosecutors lodged an appeal within hours of the decision, national media noting that the court has 30 days in which to respond.
Convicted in 2004 of helping Dutroux, former primary schoolteacher Martin has been in jail since the case was uncovered in 1996.
The decision to release her was conditional on her entering the convent in Malonne in central Belgium.
"It's akin to chucking a fox into a henhouse," said Jean-Denis Lejeune, whose then eight-year-old daughter Julie was one of four young girls killed between 1995 and 1996 from among six individuals subjected to kidnap-and-rape ordeals.
"I cannot accept this pardon and reintegration," he added.
Lejeune holds Martin every bit as responsible as Dutroux because she "knew where they were hidden (and) could have freed them."
Georges-Henri Beauthier, a lawyer for the families of the victims, said the court had "trampled on" his clients' rights.
Martin's lawyer Thierry Moreau told RTL television that his client "is no longer the woman who entered prison in 1996," adding that "her guilt will follow her to the grave.
"The only thing she can try to do is to try and atone," he added.
In a statement read out by Moreau on leaving the court, the convent said it had accepted the "challenge" of taking Martin in, recalling the suffering of the families "who crossed Hell."
Sister Christine said in the statement: "It won't be easy. ... Our hearts as women are troubled."
Martin will not be released immediately. Last year, she was all set to seek refuge in a French convent, but the French justice ministry blocked that bid on the grounds that her presence could trigger public disorder.
Dutroux, already jailed for kidnapping and rape two decades earlier, was put behind bars for life in June 2004 over the murderous spree that secured his infamy as one of Europe's worst serial killers.
Martin, who married Dutroux in 1983 and had three children by him before their divorce in 2003, had also served time in the 1980s for the initial kidnappings.
She was found guilty the second time of helping Dutroux hold his victims prisoner, and of complicity in the deaths of two of the four.
Tuesday's decision was the fifth time in all that the Belgian courts had considered her application for parole.
Leading Belgian centre-right politician Charles Michel said in a statement that the country was "perturbed" by the court's decision and that it was "urgent" to "re-launch the fight" to ensure that sentences could be enforced to the maximum.