The court overturned that verdict Wednesday and said Turcotte should face a new trial on first-degree murder charges.
The cardiologist from Saint-Jérôme, Que., admitted to the February 2009 fatal stabbing of Anne-Sophie, 3, and Olivier, 5, and was housed for 46 months in the Pinel Psychiatric Institute before being released last December.
Turcotte's defence hung on the cardiologist's state of mind at the time of the deaths.
His defence lawyer argued that Turcotte suffered from serious mental illness during the incident, and was intoxicated on windshield washer fluid as part of a suicide attempt.
After the 2011 verdict, the Crown prosecutor sought an appeal, arguing that the judge in the first trial should have never given the jury the option of finding Turcotte not criminally responsible.
The prosecutor said there was a lack of evidence to support a defence of not criminally responsible for reason of mental illness, arguing instead that the killings were premeditated, intended as revenge against former partner Isabelle Gaston, who was having an affair.