Waukesha County Circuit Judge Michael Bohren ordered the state's Department of Health Services to come up with a plan for her supervised released within 60 days. Geyser will be returned to the Winnebago Mental Health Institute until the plan is finalized, after which she is expected to reside in a group home.
Geyser -- now 22 -- was 12 when she and a classmate lured their friend into the woods in Waukesha, Wisconsin, and stabbed her 19 times to please the online fictional character Slender Man, according to authorities, in a case that continues to generate national headlines.
The victim, Payton Leutner, suffered life-threatening injuries but ultimately survived. Geyser and her co-assailant, Anissa Weier, were charged in adult court with first-degree attempted intentional homicide.
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Geyser was convicted of the charges but found not guilty by reason of mental disease or defect, and was sentenced to up to 40 years in a psychiatric institution.
Weier was found not guilty by mental disease or defect after pleading guilty to a lesser charge, and was sentenced to up to 25 years in a psychiatric institution. In 2021, at the age of 19, Weier was granted supervised release.
Weier and her family declined to comment Thursday on Geyser's release.
Testifying in a Waukesha courtroom on Thursday, three psychologists who've worked closely with Geyser testified to her preparedness for supervised release.
"At this point I am in favor, or in support, of her petition for release. Specifically, I don't think she currently poses a significant risk of substantial harm to herself, others or to property damage," psychologist Brooke Lundbohm testified to the judge over Zoom.
Lundbohm, who testified under subpoena, said Geyser's mental health had improved significantly since a 2021 suicide attempt. She can be "incredibly self-critical" and have "low self-esteem," but is "well-spoken" and "incredibly bright," Lundbohm said.
Stacie Leutner, the mother of Payton Leutner, said in a statement to ABC News ahead of Thursday's hearing: "Morgan Geyser has withdrawn her request to be released twice. More recently, her request was denied. We are confident that the judicial system will make a decision that will ensure the community, and my daughter remain safe."
Geyser was most recently denied release in April 2024.
Kenneth Robbins, another psychologist called as a witness, said Geyser "has a lot of potential" to reintegrate back into society. She has discussed goals for the future, expressing interest in becoming a librarian, and eventually a therapist for people with substance abuse disorders, he said.
Geyser was diagnosed with schizophrenia after the stabbing, but over the last two years has not exhibited psychotic symptoms and has been successfully weaned off of antipsychotic medication, Robbins said. She continues to exhibit symptoms of post-traumatic stress disorder, anxiety and autism, he said, but has not shown evidence of suicidal ideation since her 2021 attempt.
Psychologist Deborah Collins testified Geyser does not have "unrealistic goals" about what her life would look like if released, saying she understands she would need to live in a group home and "would take whatever she could get in terms of employment."
As a condition of her supervised release, Geyser understands she would need to wear an ankle monitor, Collins said.
"She wants to begin, I guess, her life outside of the institution, and recognized that she would be subject to a whole host of expectations and rules, and what could happen if she violated those," Collins said.
ABC News' Kelley Robinson contributed to this report.