During a trial inside the Hyderabad central jail, Qari Hashim was acquitted for lack of evidence, who was initially arrested in August 2005.
"It is a great victory for truth and my client. We had filed an acquittal plea under Section 265-K of the Criminal Procedure Code, arguing that there was no evidence against my client," Defence counsel, Sher Muhammad Leghari told reporters after the trial concluded.
He said Hashim had been apprehended for arranging a meeting between Wall Street journalist Pearl and Mubarak Ali Shah Gillani.
Pearl was first kidnapped by militants in January 2002 and a month later his beheaded body was found in a Karachi graveyard with videotapes of the scenes of his beheading.
The third co-accused Saud Memon, who was accused of providing the place where Pearl was kept incarcerated, had died in mysterious circumstances in May 2007.
British-born Pakistani Ahmed Omar Saeed Sheikh , who is the main accused, is currently lodged in the Hyderabad Central jail in Sindh province.
Omar was convicted in 2002 and sentenced to death but has appealed against his punishment.
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