A Sri Lankan asylum seeker, previously deemed a security risk, will be released from Villawood Detention Centre in Sydney after her adverse security assessment was overturned by spy agency Australian Security Intelligence Organisation (ASIO) .

Manokala Jenaddarsan, 41, fled war-torn Sri Lanka in 2009 with her now six-year-old son Ragavan after her husband was killed in a bomb blast.

Manokala was found to be eligible for a protection visa but was moved into detention housing at Villawood after ASIO deemed her a potential security threat, the Sydney Daily Telegraph reports.

But her lawyers on Thursday confirmed she had received a letter from Immigration Minister Brendan O'Connor indicating ASIO had reversed their decision.

"We are very pleased that Manokala and Ragavan can now live in the community because their ongoing detention has caused great psychological harm and distress to them both. We haven't been given a time and date for her release but it could be very soon," her lawyer Giri Sivaraman said.

"Manokala is one of 55 refugees who were deemed by ASIO to be a security risk and who have never been told why they have been given this adverse security assessment.''

In a statement, ASIO said the status of refugees deemed a risk to the community was constantly monitored.

"ASIO has always maintained the position that it can, and would, issue a new security assessment in the event new information of relevance came to light," the statement said.

"In respect of this individual, ASIO issued a non-prejudicial security assessment on 13 May 2013, which supersedes the previously issued adverse security assessment." (Bernama)