Both Knox and her Italian-ex-boyfriend, Raffaele Sollecito, will face another trial for the murder of 21-year-old British student Meredith Kercher back in November 2007.
Kercher was found dead with her throat slashed in her bedroom in the house she shared with Knox and others in Perugia, Italy, where the two women were exchange students.
Knox and Sollectio were acquitted of Kercher's murder in 2011 after initially being found guilty. An Ivory Coast man, Rudy Guede, was convicted of the slaying in a separate proceeding and is serving a 16-year sentence.
Prosecutors alleged Kercher was the victim of a drug-fueled sex game gone awry. Knox and Sollecito denied any wrongdoing.
Prosecutors urged the court to order a new trial based on DNA evidence that was cast aside by the appeals court. Knox spent nearly four years in prison before a judge set her free. The 25-year-old now lives in Seattle and attends the University of Washington.
Knox responded to Tuesday's ruling, calling it "painful."
"No matter what happens, my family and I will face this continuing legal battle as we always have, confident in the truth and with our heads held high in the face of wrongful accusations and unreasonable adversity," she said in a statement.
After the shocking ruling, Knox's attorney, Ted Simon, spoke to "Good Morning America," saying his client remains "very strong."
"One thing we can say both about Amanda and her family, they have shown an unquestioned resilience and fortitude and courage in the face of these absolutely unjustified allegations. There simply is no evidence. There never was, there never will be," said Simon.
The reason behind the ruling will be published within 90 days, after which the prosecution and defense will have 45 days to present their case. Knox may be ordered to return to Italy for the retrial. If she refuses, the Italian government could appeal to the U.S. government for her extradition. But that could take years and many legal experts say would likely never happen.
The Associated Press contributed to this report.