Judge Saverio Chieffi told the court he would publish the reasoning behind his decision within 90 days, after which the parties would have 45 days to present their case. The retrial is not expected until sometime early next year, to be heard in an appellate court in Florence.
After that, both parties would again be able to appeal at the Supreme Court.
Riccardo Montana, a law lecturer at City University London and an expert on the Italian legal system, said that the judges' decision to order a retrial is "not unusual when a case is very complex and there is a clear contrast between different accounts of the factual scenario."
While the Italian Supreme Court decides on points of law, the boundaries are not always clear, Montana said.
"In this specific trial, the use and interpretation of evidence was discussed," but the picture should become clearer when the full reasons for the court's ruling are issued in the coming weeks, he said.
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 even if it does, Knox might still not end up before an Italian court.
U.S. officials might reject such a request because it violates the U.S. legal principle that a criminal defendant can't be tried twice on the same allegation, said Joey Jackson, a contributor for HLN's "In Session."
Italy lacks the absolute prohibition present in U.S. law preventing authorities from retrying a criminal defendant who has been acquitted of a charge.
"We have principles that are well-founded within our Constitution, one of which is double jeopardy," Jackson said. "So as a result of that, I think it would be highly objectionable for the United States to surrender someone to another country for which justice has already been administered and meted out. So I don't think or anticipate that that would happen."
Another lawyer for Knox, Luciano Ghirga, said Monday that her client was confident in the Italian legal system and hoped one day to return to Italy as a free woman.
The Supreme Court did not order her retrial Tuesday on a charge of defamation.
Knox's conviction for defaming Patrick Lumumba, a club owner whom she accused of killing Kercher, was upheld in October 2011 by the same appeals court that cleared her of murder.
The case began in 2007, after Knox moved to Perugia to study at the University for Foreigners of Perugia for one year.
Knox, then 20, shared a room with British student Kercher.
That November, Kercher's semi-naked body was found at the home, with her throat slashed.
Police arrested Knox and Sollecito, who was her boyfriend at the time.
Two years later, they were convicted of murder, but they were cleared when they appealed the verdicts in 2011.