Akshay Anand Chand, 21, was jailed last year on charges of kidnap, assault and threatening to kill, but was found not guilty of murder by reasons of insanity.
He has been diagnosed with paranoid schizophrenia, and the Parole Board ruled it was "clear [he] cannot be considered for release" as he remains an "undue risk to the safety of the community".
In a decision released today, the board said an updated psychiatric report stated Chand now has a "well-established diagnosis of paranoid schizophrenia which is currently stable due to medication".
"He is seen as compliant and attending all unit groups but is seen to have a lack of motivation to do anything beyond what is asked of him or to work to identify his treatment needs," the board said.
"He has been encouraged by staff to explore things relating to his risk to society, his status as an insanity acquittee as well as a prisoner and the psychological factors that may have contributed to his offending. He will continue to work with a psychologist on these things in the future."
The board also noted that while Chand is seen to have made a "significant recovery in terms of the positive symptoms of his illness", it was concerned that he was not symptom free, and that he was in the very early stages of "understanding the nexus between his illness, personality, and offending".
However, the board did give its "cautious support" for escorted ground leaves for Chand to begin, as long as they stayed within the psychiatric hospital's perimeter.
It comes a day after Miss Marceau's parents welcomed a decision by the coroner to hold an inquest into their daughter's death. It will take place next year, but a date has not yet been set.
In November 2011, Chand, then 18, stabbed Miss Marceau repeatedly in her North Shore home. She died in her mother's arms.
Chand was on bail at the time and was facing charges of kidnapping, threatening and assaulting the 18-year-old university student two months earlier. He was on a 24-hour curfew and had been ordered not to associate with, attempt to contact, or go anywhere near Miss Marceau or her home.
But just 32 days after his release on bail, Chand walked to her house armed with a hammer and kitchen knife, and killed her.
- Patrice Dougan of APNZ
