The Balochistan government has withdrawn a petition seeking the transfer of the murder case to Islamabad, TV news channels reported.
A two-judge bench of the Balochistan High Court was hearing the case in which Musharraf is named as an accused.
During the proceedings, an Assistant Advocate General told the court the provincial government will provide complete security to Musharraf, currently being held at his farmhouse in Islamabad.
Musharraf's lawyer argued that blasts had occurred in the same area in Balochistan a few days ago, due to which security concerns exist for his client.
The court then disposed of the case after the provincial government retracted its request to transfer the case to Islamabad.
Baloch leader Akbar Bugti was killed in a military operation in Balochistan in 2006 when Musharraf was the President and army chief.
Musharraf is facing charges in several high-profile cases, including the Benazir Bhutto assassination case. His farmhouse on the outskirts of Islamabad has been declared a "sub-jail" for security concerns.