A US appeals court has ruled that the man convicted in the 1979 murder and disappearance of a six-year-old boy in New York City should receive a new trial, or be released.

Etan Patz’s disappearance on his way to a school bus stop in Manhattan rattled the city, and became one of the most prominent national missing children’s cases in the US.

Pedro Hernandez, a convenience store owner, was convicted of the killing in 2017 after a first trial in 2015 ended in a hung jury. He had confessed to luring Patz to a basement and attacking him.

In his appeal, Hernandez argued that that the jury had received improper instructions that violated US Supreme Court precedent and prejudiced his verdict.

“We conclude that the state trial court contradicted clearly established federal law and that this error was not harmless,” the Second Circuit Court of Appeals wrote in its decision.

A spokesperson for the Manhattan District Attorney’s office said it was reviewing the decision.

The case haunted investigators for decades after the boy disappeared from the SoHo neighbourhood of Manhattan, and he has never been found.

An aggressive missing person’s campaign featured the boy’s face on milk cartons and posters across the US. A sweeping investigation drew in the Federal Bureau of Investigation, and raised new awareness about missing children.

In 2012, authorities interrogated Hernandez, who told them he lured Patz down to a basement with an offer of a drink or a soda before strangling the young boy.

Yet the appeals court wrote in its decision that Hernandez “has a documented history of mental illnesses and a low intelligence quotient (IQ)” and “initially confessed after approximately seven hours of unwarned questioning by three police officers.”

After he confessed to the killing police read Hernandez his Miranda rights – a constitutionally mandated warning about self-incrimination – and recorded a video confession. He did so again for a federal prosecutor.

Prosecutors relied heavily on the video confessions during Hernandez’s second trial.

The appeals court’s decision to order a new trial hinges on instructions that the 2017 jury received about those confessions as they deliberated Hernandez’s fate.

In one note, jurors asked the judge to explain whether they should disregard his subsequent confessions if they found the first one “was not voluntary.”

The state judge had replied: “The answer is, no.”

The jury ultimately convicted Hernandez of felony murder and kidnapping, but acquitted him on the charge of intentional murder.

In his appeal, Hernandez argued that this instruction was inconsistent with legal precedent and had unfairly prejudiced the jury.

Lower courts denied his bid, but the federal appeals court ultimately sided with him in Monday’s decision.

Hernandez’s attorney Harvey Fishbein released a statement saying: “We are grateful the Court has now given Pedro a chance to get his life back, and I call upon the Manhattan District Attorney’s Office to drop these misguided charges and focus their efforts where they belong: on finding those actually responsible for the disappearance of Etan Patz.”