Skakel's current attorney, Hubert Santos, said he expects to file a motion for bail on Thursday. If a judge approves it, Skakel could then post bond and be released from prison.
"We're very, very thrilled," Santos said. "I always felt that Michael was innocent."
Skakel argued his trial attorney, Michael Sherman, was negligent in defending him when he was convicted in the golf club bludgeoning of Martha Moxley when they were 15 in wealthy Greenwich.
Prosecutors contended Sherman's efforts far exceeded standards and that the verdict was based on compelling evidence against Skakel.
John Moxley, the victim's brother, said the ruling took him and his family by surprise and they hope the state wins an appeal.
"Having been in the courtroom during the trial, there were a lot of things that Mickey Sherman did very cleverly," Moxley said about Skakel's trial lawyer. "But the evidence was against him. And when the evidence is against you, there's almost nothing you can do."
In his ruling, the judge wrote that defense in such a case requires attention to detail, an energetic investigation and a coherent plan of defense.
"Trial counsel's failures in each of these areas of representation were significant and, ultimately, fatal to a constitutionally adequate defense," Thomas wrote. "As a consequence of trial counsel's failures as stated, the state procured a judgment of conviction that lacks reliability."
Among other issues, the judge wrote that the defense could have focused more on Skakel's brother, Thomas, who was an early suspect in the case because he was the last person seen with Moxley. Had Sherman done so, "there is a reasonable probability that the outcome of the trial would have been different," the judge wrote.
During a state trial in April on the appeal, Skakel took the stand and blasted Sherman's handling of the case, portraying him as an overly confident lawyer having fun and basking in the limelight while making fundamental mistakes from poor jury picks to failing to track down key witnesses.
Sherman has said he did all he could to prevent Skakel's conviction and denied he was distracted by media attention in the high-profile case.
Prosecutors said Sherman spent thousands of hours preparing the defense, challenged the state on large and small legal issues, consulted experts and was assisted by some of the state's top lawyers. Sherman attacked the state's evidence, presented an alibi and pointed the finger at an earlier suspect, prosecutors said.
"This strategy failed not because of any fault of Sherman's, but because of the strength of the state's case," prosecutor Susann Gill wrote in court papers.
Skakel, who maintains his innocence, was denied parole last year and was told he would not be eligible again to be considered for release for five years.