The court told a federal judge to hold a hearing to decide whether evidence "that could not have been obtained at the time of trial" could establish Davis' innocence. His case has become a rallying cry for death penalty opponents.
Davis' attorneys contend he deserves a new trial because new evidence proves he was mistakenly identified as the killer. They say several trial witnesses have recanted their testimony, and others who did not testify during the trial have said another man confessed to the killing.
"This is exactly what we asked for," said Jason Ewart, Davis' attorney. "It's been years since these witnesses have come forward, and they've never had their day in court. And now they will."
Davis was convicted 18 years ago for the 1989 slaying of Savannah, Ga., police officer Mark MacPhail, who was shot twice while working off-duty as a security guard at a bus station. He was gunned down after rushing to the aid of a homeless man who had been attacked.
Davis' execution has been delayed three times, including a ruling by an appeals court last year that gave the 40-year-old another chance to press his appeal. The panel rejected the appeal in April, and federal and state courts have repeatedly denied his request for a new trial.
The ruling on Monday, however, may give new life to the case.
"The substantial risk of putting an innocent man to death clearly provides an adequate justification for holding an evidentiary hearing," said Justice John Paul Stevens, writing for the court. Justices Ruth Bader Ginsburg and Stephen Breyer concurred with Stevens.
In a strongly-worded dissent from Justices Antonin Scalia and Clarence Thomas, Scalia called Davis' claim a "sure loser" and noted that "every judicial and executive body that has examined petitioner's claim has been unpersuaded."
"Transferring his petition to the District Court is a confusing exercise that can serve no purpose except to delay the state's execution of its lawful criminal judgment," wrote Scalia.
Davis' family said the ruling gives them hope that he could be exonerated.
"I'm always optimistic," said his sister Martina Correia, who recently returned from trips to Paris and the United Kingdom to urge a new trial. "This means he gets another chance. And we're going to keep fighting for that chance."
They have been buffeted by support from a host of high-profile officials, with appeals to stop Davis' execution from former President Jimmy Carter, Pope Benedict XVI and Nobel Peace Prize laureate Archbishop Desmond Tutu.
MacPhail's mother, Anneliese MacPhail, said she was "in shock" and worried the ruling will plunge a family seeking closure deeper into turmoil.
The ruling comes as MacPhail's friends and former colleagues prepare for a rally at a Savannah courthouse to honor the 20th anniversary of his death Wednesday.
"They are pussyfooting around it," she said. "This has gone on long enough. The courts have been through this two or three times and nothing has changed."
It's unclear when the new hearing will be scheduled. Chatham County District Attorney Larry Chisolm, who inherited Davis' case after taking office in January, said he does not expect "a quick outcome."