The ABC report said Zygier was working for Mossad when he was placed in a maximum-security prison for an unspecified crime in 2010. The report said he died in December of that year, apparently by suicide.
Israel, which refused to acknowledge the Australian report for nearly 24 hours, partly lifted the veil of secrecy Wednesday.
Early in the day, it allowed Israeli media to report on the Australian news report. Then, late at night, a court order lifted parts of a series of gag orders dating to March 2010, and confirmed elements of the report.
Wednesday's court order, emailed to reporters by Israel's Justice Ministry, confirmed that an Israeli man who held dual citizenship in an undisclosed country died in custody in 2010.
Identifying the man only as the Hebrew equivalent of John Doe, the court order said the prisoner's family was notified immediately after he was detained. It said he was imprisoned under a court order and that the prisoner's full rights were retained. It named three Israeli lawyers who represented him.
The court order said that after the prisoner was found dead in his cell, a judge ordered an investigation into his death. About six weeks ago, the court statement said, the investigation concluded that he committed suicide. However, a judge has now asked the state to check for possible negligence.
In another curious wrinkle in the case, Israeli TV reported that Zygier had worked as a clerk in the international business department of one of Israel's most prestigious law firms, Herzog Fox & Neeman. The firm is partially owned by Israel's Justice Minister, Yaakov Neeman.
When asked in parliament about the Australian TV report on Tuesday, Neeman said he knew nothing of the case but said any allegations, if true, should be investigated.
Australian legislators demanded answers Wednesday about the suspicious death.
Among the lawmakers demanding clarifications was shadow Foreign Affairs Minister Julie Bishop, who told ABC that she wanted to know why details of the case were being censored in Israel. She said she would raise the issue with the Israeli Embassy.