The 52-year-old from Tandragee Road in Markethill, Co Armagh, will be released from custody on Friday for a hospital appointment to receive ongoing cancer treatment.
Frazer has also been banned by the judge from entering Belfast under any circumstances.
He is facing charges related to protests over the restriction of the flying of the Union flag and is accused of encouraging offences in an address to protestors.
He is further accused of three counts of taking part in an unnotified public procession, obstructing traffic in a public place, and possession of a prohibited weapon - namely, a Taser.
Last week, Frazer was refused bail. But on Thursday, his legal team successfully applied for temporary compassionate release.
Frazer was granted bail for a few hours, on the condition that he remains in the company of a named person. He must return to prison by 4pm on Friday.
Frazer is one of three prominent loyalists arrested during the ongoing flag tension, as part of the PSNI's Operation Dulcet into crimes arising out of protests.
Ulster People's Forum spokesman Jamie Bryson and former BNP fundraiser Jim Dowson were also arrested and charged with a string of offences.
Bryson was remanded in custody, while Dowson has been released on bail.