Missing boy William Tyrrell was in foster care at the time of his disappearance, A Current Affair can reveal, after a ruling by the NSW Court of Appeal clarified the law.

In the Court of Appeal documents, obtained by A Current Affair , the judge found that the fact of William being in the parental responsibility of the NSW Minister for Family and Community Services, and in the care of departmentally approved carers, was a matter of "legitimate public interest".

The then-three-year-old William vanished while visiting members of his foster family near Kendall on the NSW Mid North Coast on September 12, 2014.

The department responsible for looking after William sought to prevent publication of the fact William was in care, but a Supreme Court judge permitted the publication, and the three judges of the Court of Appeal upheld his ruling.

Read more: A Current Affair chief on the importance of William Tyrrell foster revelation

Supreme Court of NSW judge Justice Brereton is also quoted as noting "the tragic probability that (William) is no longer alive".

Missing boy William Tyrrell was last seen in his grandmother's front yard wearing a Spiderman outfit. (Supplied, NSW Police) (Supplied)

William Tyrrell (3) was playing and wearing a Spiderman costume when he disappeared on 12 September 2013 from the front of his grandmother's home in Kendall, NSW. At first it was thought he had run into nearby bushland, but police later looked at the possibility of human intervention. (Supplied)

There is no suggestion that either William's biological family or his foster family have anything to do with his abduction, or know his whereabouts, and no suggestion of any fault on their parts.

For three years, William's status as a foster child has been a closely-guarded secret of the NSW State Government.

The Department of Family and Community Services has repeatedly threatened journalists with criminal charges if they revealed William was in the care of the state when he went missing.

However, the Court of Appeal noted Justice Brereton disagreed with their interpretation of the law, and also rejected the notion that the information would have a negative impact on the investigation.

He ruled there was substantial public interest in the "accountability and scrutiny of the out-of-home-care system".

Missing three-year-old William Tyrrell. (AAP) (AAP)

William vanished on September 12, 2014.

"The notion that the efforts of trained and experienced police investigators might be distracted - presumably by an influx of pseudo-information in the nature of rumour and speculation - is quite unconvincing," he is quoted as saying in the Court of Appeal judgement.

William went missing while he played in the yard of a Kendall home.

A massive search by police, locals and other volunteers failed to turn up any trace of the missing three-year-old.

A $1 million reward has been announced for information leading to William's whereabouts.

Later, NSW Police Homicide Squad boss Mick Willing announced police were examining the possibility that William had fallen into the clutches of a paedophile ring.

"We are vigorously pursuing that line of inquiry," he said.

An unprecedented $1 million reward was announced for information leading to William's whereabouts.

William's foster parents have chosen not to reveal their identities, but have spoken of their hope that he is alive, safe, and "feeling loved".

William has been missing for nearly three years.