Macron made the admission during a visit to the home of the widow of Maurice Audin, a Communist pro-independence activist who disappeared in 1957.
He was just 25 when, during the height of the battle of Algiers, he was arrested at his home by French paratroopers, accused of harbouring wanted members of the party.
He died of his injuries sustained while being torured in detention.
For decades France had denied it was behind Audin's death. His widow was originally told he had escaped during a transfer between prisons.
Only in 2014 did the former French president François Hollande admit he had actually died in detention.
Paris will now de-classify documents relating to disappeared civilians and soldiers both French and Algerian.
“It was common practice by the French army during the battle of Algiers,” says Tramor Quemener, an Algerian war historian at the University of Paris 8.
“The head of the French police in Algiers said that more than 3,000 were probably disappeared like Maurice Audin.”
The question of the French state's involvement in the disappearance of resistance fighters and independence sympathisers remains a delicate one.
President Macron's move will anger many, especially some French soldiers who fought in the war, who say both sides committed crimes during the conflict.
“It opens the possibility of re-examining other cases,” says Mohammed Harbi, a historian and former independence fighter with the FLN.
“One such case is that of one of the leaders of the Association of Muslim Clerics, Larbi Tébéssi, who died in similar circumstances to Maurice Audin.”
The French Communist party has fought for decades to have the French state recognise its role in the murder of Maurice Audin.
Although Macron didn't apologise for Audin's death, his widow Josette said she thought she would never see the day that France admitted its involvement.
“It is a victory for all of us who fought for the truth about the torture and murder of Maurice Audin at the hands of the French army,” the leader of France’s Communist party Pierre Laurent told RFI.
“Emmanuel Macron’s declaration, which recognizes that this was the result of a policy of repression and torture, is a sea-change.
“I think France can hold its head a little higher following the recognition of this crime. And it opens a new chapter in the ongoing debate about the consequences colonization.”
The legacy of Algeria's war of independence remains one of the most divisive topics in contemporary France.
Emmanuel macrons declaration on Thursday looks set to re-energise the debate on one of the darkest chapter's in modern French history.