The judge ordered him to report to court every week and forbade him from leaving Spain for six months, the High Court of Galicia, which is leading the investigation, said in a statement yesterday.
He also banned him from driving trains for six months.
Media reports have suggested that the 52-year-old driver, Francisco Jose Garzon Amo, was travelling at more than double the speed limit for that stretch of the line when the crashed happened.
Police detained Garzon Amo on Thursday, a day after what is Spain's deadliest rail disaster in decades, on suspicion of reckless homicide.
He was still in hospital recovering from a light head injury he suffered in the crash.
Yesterday, a police car delivered him in handcuffs to the courthouse for the closed hearing. He had spent the previous night in a police cell.
Garzon Amo was dressed in a blue shirt and a scar was visible from his injury.
Just hours before the court hearing began regional health officials said a woman critically injured in the crash had died in hospital, bringing the toll to 79.
Flowers and candles were placed at the gates of the city's cathedral, a year-round destination for Roman Catholic pilgrims, which will host a memorial service for the victims today.
Prime Minister Mariano Rajoy, who was born in Santiago de Compostela, and Crown Prince Felipe are scheduled to attend the service.
"We are really feeling the impact. People are praying. It is a great tragedy," said 70-year-old Marlen de Francisco, who sells souvenirs in the cathedral square.
"All day people are asking me for note paper so they can write messages and put them on the cathedral gates.