But the charges against Richard Rosario, 40, remain open and US prosecutors said they could still decide to retry him.
Rosario was sentenced to 25 years to life in prison after being convicted of murdering teenager George Collazo in broad daylight in the Bronx in June 1996.
Rosario maintained he was in Florida on the day of the killing and provided nine witnesses, but his defense lawyer never sent an investigator to Florida and the witnesses were never interviewed.
"Mr Rosario was convicted at a trial where he had ineffective counsel and several alibi witnesses were never interviewed by his attorney," said district attorney Darcel Clark.
"The charges against Mr. Rosario will remain open while we complete the alibi witnesses interviews and reinvestigate the case in order to decide whether to retry Mr. Rosario."
Clark reviewed the case after she took office in January when Rosario's new lawyers filed another appeal based on new evidence.