Immigration Minister Alex Hawke has decided to allow the Sri Lankan family to reside in the Perth community.

“In making this determination I am balancing the government’s ongoing commitment to strong border protection policies with appropriate compassion involving children in held detention,” he said on Tuesday.

“The family will now reside in suburban Perth through a community detention placement, close to schools and support services, while the youngest child receives medical treatment.”

Hawke said his decision to release the family from detention did not create a pathway to granting visas.

“As required by court orders, I will consider at a future date whether to lift the statutory bar presently preventing members of the family from reapplying for temporary protection, for which they have previously been rejected,” he said.

Labor deputy leader Richard Marles described the family’s release as a common sense decision.

“The last place this family should be is on Christmas Island at the enormous expense to the Australian public,” he told Sky News.

“You have ministerial discretion so there can be the rule of common sense applying and that’s what matters here.”

Marles said showing the family compassion and exercising discretion would not erode the country’s border laws or restart the people-smuggling trade.

“None of that is being altered. That regime is still absolutely there,” he said.

“That is the message people smugglers will be hearing and that is the facts on the ground they will be seeing so I don’t think this is going to provide any incentive at all.”

Family friend Angela Fredericks, from Biloela in Queensland, said their release had been more than three years in the making.

“There will be a lot of tears, immense sense of relief and gosh, there will be so much pure joy,” she said.

“It means that love wins. It means that we’re the town that did put people before politics.”

The family has been in detention since 2018 as their fight against deportation has crawled through the courts.

Their plight re-entered the spotlight after four-year-old Tharnicaa was flown to the mainland for medical treatment last week.

Tharnicaa’s mother Priya is with her at Perth Children’s Hospital but her father Nades and older sister Kopika are still on Christmas Island.

The head of the Western Australian health department wrote to the Department of Home Affairs last week advising the Murugappan family be reunited in Perth.

It was not a plea for compassion but based on the clinical advice of Tharnicaa’s treating doctors that she must be with family.

Her treatment for pneumonia and sepsis, a life-threatening blood infection, could take up to eight weeks.

While the government is backing away from its hardline stance on the family, Prime Minister Scott Morrison has already indicated they will not be offered permanent visas.