Francesco Schettino captained the ship that struck a rock formation off the Tuscan coast Jan 13, killing 32 people.
For almost three months he has been ordered to not leave his home without special permission.
The Genoa-based ship was carrying 4,200 passengers and crew at the time of the disaster off Giglio Island.
Schettino is accused of manslaughter for sailing the vessel off course and later abandoning ship.
The Court of Cassation said Schettino could potentially compromise evidence because the investigation is still in progress.