Chief Constable George Hamilton will not be contesting a finding of bias in the original RUC investigation into one of Northern Ireland's worst terrorist atrocities, the High Court has been told.
The announcement was made in a legal action taken by relatives of those killed in the McGurk's Bar massacre.
Fifteen people were murdered when the north Belfast pub was blown up by the UVF in December 1971. Four years ago a Police Ombudsman probe identified investigative bias in how the RUC handled the case.
It concluded that detectives failed to properly probe loyalist paramilitary responsibility for the bombing because they were so focused on the mistaken idea that the IRA was to blame.
At the time of the attack it was suggested that it may have been an accidental "own-goal".
But a separate review carried out by the police's now defunct Historicial Enquiries Team (HET) reached a different verdict. It claimed there was no evidence of any bias on the part of the RUC investigators.
Those findings have been challenged by Brigid Irvine, whose mother Kathleen was among those killed in the attack.
Her legal team sought a judicial review in a bid to have the HET report quashed, claiming its conclusions were irrational.
In court yesterday counsel for the PSNI confirmed the new position in the case.
Peter Coll QC said: "I can advise the court that the Chief Constable does not wish to contest the issue regarding investigative bias and findings by PONI (Police Ombudsman for Northern Ireland) in respect of the same."
Ms Irvine's barrister, David Heraghty, responded that the "change of heart" was welcomed by his client.
Proceedings were adjourned to next month, when a final resolution to the case is expected.
Although Ms Irvine did not attend the hearing, her sister Pat described Mr Hamilton's decision as "courageous".
"We welcome that and thank him for his bravery," she said outside court.
But she added: "It makes you wonder what exactly has made him come to his conclusion that didn't make (previous Chief Constable Matt Baggott) come to the same conclusion."
She stressed how the families had been fighting for 44 years to find out the full circumstances surrounding the bombing. "All we have ever asked for is the truth, and we will continue to ask for it until we get it."
Her solicitor, Paul Pierce of KRW Law, also questioned what information Mr Hamilton had which his predecessor was denied access to.
Mr Pierce thanked the Chief Constable for standing by a commitment to reconsider the issues in the case.
"We believe he has made a significant decision today, and the right one," he said.
"All too often we have seen how the State will seek to protect itself against any allegation of wrongdoing to ensure they avoid any liability in the criminal or civil courts.
"We can only hope that today's announcement by the Chief Constable marks a departure from the policy of delay, deny and defend at any cost, which is a feature now of so many conflict-related cases."