"It is apparent that there is no place in Georgia where a registered sex offender can live without being continually at risk of being ejected," read the unanimous opinion, written by presiding Justice Carol Hunstein.
The law had been targeted by civil rights groups who argued it would render vast residential areas off-limits to Georgia's roughly 11,000 registered sex offenders and could backfire by encouraging offenders to stop reporting their whereabouts to authorities.
State lawmakers adopted the law in 2006, calling it crucial to protecting the state's most vulnerable population: children.
Georgia's law, which took effect last year, prohibited them from living, working or loitering within 1,000 feet (305 meters) of just about anywhere children gather schools, churches, parks, gyms, swimming pools or one of the state's 150,000 school bus stops.
It also led to challenges from groups like the Southern Center for Human Rights, which argued that it would force some offenders to live in their cars or set up tents or trailers in the woods, and undermine other efforts to keep track of offenders.
Twenty-two states have distance restrictions varying from 500 feet (152 meters) to 2,000 feet (610 meters), according to researchers. But most impose the offender-free zones only around schools, and several apply only to child molesters, not all sex offenders.
The Georgia Supreme Court ruling said even sex offenders who comply with the law "face the possibility of being repeatedly uprooted and forced to abandon homes." It noted that the offender would be in violation of the law whenever someone opts to open a school, church or other facility serving children near the offender's home.
The court also said the statute looms over every location that a sex offender chooses to call home and notes while the case in question particularly involves a day care center, "next time it could be a playground, a school bus stop, a skating rink or a church."
Provisions that also ban sex offenders from loitering and working within 1,000 feet (305 meters) of those places were not reversed.
A judge ruled last year that the law's school bus stop provision could not be enforced unless school boards officially designated the stops. Few boards have since done so.