The police plan to prosecute Malcolm Rewa for the murder of Susan Burdett.
Police Commissioner Mike Bush said in a statement that Solicitor-General Una Jagose will apply to the High Court to retry Malcolm Rewa for Burdett's 1992 murder.
Bush said a team of senior homicide detectives have started preparing work on the file, under the oversight of Detective Superintendent Dave Lynch.
Burdett's family have been told, as has Rewa.
Burdett's brother Jim confirmed he had been told of the development but did not want to comment. He has previously said he had long believed Teina Pora was not involved and that the family wanted justice for Susan.
Pora was twice wrongly convicted of the murder and spent 22 years in jail. He could not be contacted for this report but last year told the Herald that the police should look for justice for Susan Burdett.
"If they do that ... I will be happy," he said after his convictions were quashed and he accepted an offer of compensation. "I know there has been a lot of talk about me in the last couple of weeks. Now the talk needs to be about who killed Susan Burdett and what the police are doing about that."
Tim McKinnel, the private investigator whose work led to Pora's convictions being quashed, welcomed the decision.
"We have been asking for a review of all of the information and this is a positive step in the right direction and we will offer all the assistance we can," McKinnel said.
Commissioner Bush said that after Pora's conviction was quashed, the decision to stay the prosecution of Rewa was reviewed at the request of police. Bush last year said police did not have enough new evidence to lift an order stopping them from taking action.
Pora's team has long pushed for the stay to be lifted enabling Rewa to be tried for the murder a third time. Ingrid Squire, one of Pora's lawyers, said they had been writing to the Solicitor-General inviting her to take this step.
"We are very pleased at the decision," Squire told the Herald. "In our view it is the appropriate step and one more step in the right direction."
Squire last year said that in her view the case easily meets the threshold of "exceptional circumstances" required for a stay of proceedings to be lifted.
"What I think we have to remember is that the two juries that considered the charge against Malcolm Rewa were of the belief and understanding that another man had confessed to Susan's murder, and secondly that other man, Teina Pora, had been found guilty by a jury," she told Stuff.
"What we now know is that those confessions weren't worth the paper they were written on, [they were] utterly, wholly unreliable. And secondly Teina Pora has been found to be innocent, so it's a whole new ball game."
Bush said in a statement: "A team of senior and experienced homicide detectives under the oversight of Detective Superintendent Dave Lynch have commenced preparation work on the file, and will work with the Manukau Crown Solicitor to make the application in the High Court and manage the case through to a third trial if one is granted."
Rewa was tried twice for the murder of Burdett in 1998, and in both trials the jury was unable to reach a verdict. He was, however, convicted of her rape.
Susan Burdett was a 39-year-old accounts clerk and an avid ten-pin bowler who lived alone.
She returned late from club night at the Manukau Superstrike on Monday, March 23, 1992, and, after showering, was raped and battered to death. Her killer posed her body, crossing her legs, which were positioned off the bed.
Lying on the bed beside her was the softball bat she kept for protection.
A brutal murder, a fight for freedom: Teina Pora timeline
March 23, 1992: Susan Burdett raped and murdered in her home in South Auckland.
March 23, 1993: Teina Pora charged with burglary, sexual violation and murder.
June, 1994: Pora convicted as a party to the rape and murder on the basis of confessions he made. Sentenced to life in prison.
May, 1996: Rewa arrested after attacking a young woman in the inner Auckland suburb of Remuera; DNA from Rewa's father found to match semen from Burdett crime scene.
1998: Rewa eventually convicted of the rape of 27 women, including Burdett but two juries fail to reach a verdict on murder. He was sentenced to preventive detention with a minimum non-parole period of 22 years.
1999: Court of Appeal quashes Pora's convictions as a result of the DNA evidence implicating Rewa.
June 2000: Pora was again convicted at his retrial, based on his confessions and testimony by witnesses, some of whom, it later emerged, were paid. His appeal to the Court of Appeal was dismissed.
September 2009: Private investigator and former police detective Tim McKinnel visits Pora in prison and is given permission to make inquiries on Pora's behalf.
September 2011: Pora team files notice of application for the Royal Prerogative of Mercy but later change tact to the Privy Council.
May 2012: Police's criminal profiling expert goes public in Herald with view Pora not involved; Pora's team sue police claiming it is unlawfully withholding evidence, Burdett's brother says Pora is innocent.
February 2013: It is revealed police paid some prosecution witnesses.
August 2013: Police Association calls for an independent inquiry into Pora's convictions.
April 2014: Pora granted parole at his 13th appearance before the board and after spending 22 years in jail.
November 2014: Five-member Privy Council panel hears appeal.
March 3, 2015: Privy Council quashes convictions.
The main players - where are they now?
For the Crown:
Paul Davison, QC Lead prosecutor in both trials against Teina Pora Appointed a judge of the High Court in December 2015. In a 2006 interview with the Herald, he acknowledged the system is not foolproof and said he has advocated for an independent body to examine possible miscarriages of justice.
Dr Mathew Downs Appointed a judge of the High Court last August. A criminal law specialist, Downs did the grunt work for the Crown in the appeal Pora's team took to the Privy Council and acted as second counsel in London.
Michael Heron, QC Now an independent barrister. Work includes Government contracts. Was the Solicitor-General at the time of the Privy Council hearing, headed the Crown's representation in London.
Steve Rutherford Officer in charge of the Burdett murder investigation. Made a Member of the New Zealand Order of Merit in the 1999 Queen's Birthday Honours in recognition of his work on the re-investigation of the rape and murder of Janine Law a decade after the initial police team wrongly concluded Ms Law died from an asthma attack. He retired in 2008 after a career of 36 years.
Peter Marshall, Police Commissioner 2011-2014 High Commissioner to the Cook Islands. Made a Companion of the New Zealand Order of Merit in the 2014 Queen's Birthday Honours List.
As Police Commissioner he rejected a request from Pora's advocate, former detective Tim McKinnel, for the police to re-examine the case against Pora.
Andy Lovelock, Detective Superintendent In charge of the police's Burdett case file after Pora was convicted at retrial in 2000 Made an Officer of the New Zealand Order of Merit in the 2015 Queen's Birthday Honours for services to the New Zealand Police and the community. Retired last year and has taken a role on Britain's massive inquiry into historic child abuse.
For Pora:
Tim McKinnel, private investigator Led investigation into the miscarriage on behalf of Mr Pora. Named a finalist for the 2015 Herald New Zealander of the Year. A former police detective, he began work on the case in 2009, partly unpaid. Currently works for Greenpeace investigating slavery in international fishing.
Jonathan Krebs Barrister, lead lawyer for Mr Pora. A prosecutor and defence counsel based in Napier. Past cases include successful prosecution of Jules Mikus for the 1987 murder of six-year-old Teresa Cormack. Krebs argued Pora's appeal at the Privy Council along with fellow Hawke's Bay lawyer Ingrid Squire.
Dave Henwood Police specialist criminal profiler. Censured by police headquarters for telling the Herald he had no doubt that Pora was innocent. He has retired as a detective but continues to work as a non-sworn officer. He was an expert witness for the Crown when Malcolm Rewa was convicted of sex attacks on 25 women, including the rape of Burdett. He was not called to give evidence in the Pora trials.
Greg O'Connor, former Police Association president Retired from role late last year, standing as a Labour candidate in the upcoming election. Came under pressure in 2013 after making a call - unprecedented for the association - for an independent inquiry into Pora's convictions, citing disquiet among rank and file members.