The court ruled the judge overseeing the original case did not give clear enough instructions to the jury concerning a key piece of evidence.
Lyne Massicotte disappeared during the summer of 2003 after travelling to Quebec City from Chambly, near Montreal, to meet Perreault.
Her remains were never found.
Perreault was arrested six years later after making a confession to an undercover police officer who was posing as a criminal in a so-called "Mr. Big" sting operation.
He was convicted of first-degree murder by a jury in 2011.
Quebec's Court of Appeal had ruled that the confession was admissible, but now says the judge should have given better instructions to the jury about what weight to give to the confession when making their final decision.
Crown prosecutors now have 60 days to decide whether or not to appeal the order for a new trial to the Supreme Court of Canada.
Challenging Mr. Big
Alain Perreault lost his original appeal in 2013.
But the case went back to the Quebec Court of Appeal in 2014 after the Supreme Court of Canada set new criteria for the use of "Mr. Big" sting operations by police.
In 2014, Canada's highest court threw out a confession made to undercover police by Nelson Lloyd Hart from Newfoundland who had also been convicted of murder.