Honeymoon murder accused Shrien Dewani has been found fit to stand trial for his wife's murder, a move her sister hailed as "a huge step in the right direction".

A mental health panel in South Africa unanimously decided that the 34-year-old businessman, from Bristol, is not mentally ill and should be tried in October for Anni Dewani's murder in Cape Town.

Her sister Ami Denborg said: " It's a relief for all of us. We've been waiting quite a long time for this. I know this autumn is going to be tough for us but we still want the trial to start so that we can get the information we need, we can get to know what really happened.

"It feels like we're moving forward. It's still a long way to go but at least we're taking steps in the right direction, and this feels like a huge step in the right direction."

Today director of public prosecutions Rodney de Kock told the Western Cape High Court: "The accused is not mentally ill. The accused is not certifiable in terms of the Mental Health Act."

Dewani's lawyer Francois van Zyl said the mental health panel - with members including Professor Tuviah Zabow, who was appointed by the court as a psychiatrist for Dewani - had made a unanimous decision.

"We are in agreement. There is no objection," Van Zyl said.

Dewani, whose family attended court, sat during today's hearing and thanked the judge as he was led down to the holding cells, the South African Press Association reported.

He will be held at Valkenberg Hospital in Cape Town, as agreed under the terms of his extradition from the UK, until his next appearance for a pre-trial hearing on September 9 , before his trial starts on October 6.

The millionaire is accused of ordering Anni's murder during their honeymoon in November 2010. She was shot in the neck as the couple travelled in a taxi on the outskirts of Cape Town.

Dewani, who has not yet entered pleas, faces charges of conspiracy to commit kidnapping, robbery with aggravating circumstances, murder, kidnapping, and defeating the ends of justice.

He has previously claimed that the couple were kidnapped at gunpoint as they drove through Gugulethu township, and he was released unharmed but his wife's body was found in the abandoned car the next day.

Following a protracted legal battle over the seriousness of his mental health problems, Dewani, who was detained in a hospital in Britain for depression and post-traumatic stress disorder, was extradited from the UK in April to face trial.

He previously appeared at Western Cape High Court on June 20 after receiving treatment at Valkenberg, and the court ruled he would stand trial in the autumn if found fit by a mental health panel.

A panel of three psychiatrists and a clinical psychologist assessed Dewani's mental health over 30 days.

Three men have been convicted and jailed over Mrs Dewani's death, including taxi driver Zola Tongo, who was given 18 years after admitting his role in the killing.

Xolile Mngeni, who prosecutors claim was the hitman, was convicted of premeditated murder over the shooting, and another accomplice, Mziwamadoda Qwabe, pleaded guilty to murder and was handed a 25-year prison sentence.