Sweden on Tuesday announced that tough prosecutor Krister Petersson will relaunch the probe into the 1986 murder of prime minister Olof Palme, still a mystery three decades on despite countless leads.

Palme was gunned down in the street after leaving a Stockholm cinema with his wife, a killing that sent shockwaves through the tranquil Scandinavian nation.

The gunman ran off with the murder weapon, leaving the charismatic Social Democratic premier dying in a pool of blood on the pavement. Despite more than 10,000 people being questioned and 134 claiming responsibility for the crime, the case has never been solved.

Petersson, chief prosecutor notably for organised crime in Stockholm, has tackled several major cases over a 20-year career, including the 2003 murder of foreign minister Anna Lindh, who was stabbed to death in a department store by a man with psychiatric problems.

Petersson will take up the new job in February, Sweden's prosecution service said.

"I feel honoured and I accept the mission with a great amount of energy," he said in a statement. "It is an interesting and important task."

Along with the Lindh case, Petersson also handled the trial of John Ausonius, who shot 11 immigrants in the 1990s -- some of them using a laser target, earning him the nickname "Laser Man". One of his victims died, and Ausonius was sentenced to life in jail in 1994.

By bizarre coincidence, the prosecutor shares an almost identical name with the man convicted of the murder in 1989 -- Christer Pettersson, a petty criminal and drug addict who was identified by Palme's widow Lisbet in a widely-criticised line-up.

He was freed months later by an appeals court which dismissed Lisbet's testimony on a technicality, and died in 2004. He had admitted the murder, before retracting his confession.