A Canadian judge has granted bail to a Chinese executive facing possible extradition to the US.

More: Huawei Q&A: What you need to know about the Chinese giant

Huawei chief financial officer Meng Wanzhou was arrested in Vancouver on 1 December on charges related to contravening sanctions against trade with Iran.

The US has accused Huawei of using a Hong Kong shell company to sell equipment in Iran in violation of U.S. sanctions. It also says that Meng and Huawei misled banks about the company's business dealings in Iran.

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Justice William Ehrcke announced his decision to grant Meng Wanzhou bail Tuesday after two an half days of hearings.

The prosecutor in the case initially argued for Meng's bail request to be denied, given her extensive resources and incentive to bolt.

However, Meng's lawyer David Martin said the accused was willing to pay to monitor her and that she would also be willing to wear an ankle monitor.

Under the defence proposal, Meng's travels would be restricted to Vancouver and surrounding municipalities. Martin said Meng's husband would put up both of their Vancouver homes plus $1 million Canadian (NZ$1.09 million) for a total value of $15 million Canadian as collateral.

These arguments seemed to have been enough to persuade the judge to grant bail.

- AP