A Pakistani court on Thursday overturned the death sentence for British-born militant Ahmed Omar Saeed Sheikh, who had been convicted over the 2002 killing of American journalist Daniel Pearl.
Sheikh's defence lawyer Khawja Naveed told AFP his client's sentence had been reduced to seven years in prison.
Since Sheikh has been in prison since 2002, he was expected to be released, but the court had not yet issued that order, Naveed added.
Prosecutors did not immediately comment.
Pearl, 38, was the South Asia bureau chief for The Wall Street Journal when he was abducted and beheaded in Karachi in 2002, while researching a story about Islamist militants.
A graphic video showing Pearl's decapitation was delivered to the US consulate in the city nearly a month later.
Sheikh was arrested in 2002 and sentenced to death by an anti-terror court, while three other co-accused received life imprisonment.
In January 2011, a report released by the Pearl Project at Georgetown University following an investigation into his death made chilling revelations, claiming that the wrong men were convicted for Pearl's murder.
The investigation, led by Pearl's friend and former Wall Street Journal colleague Asra Nomani and a Georgetown University professor, claimed the reporter was murdered by Khalid Sheikh Mohammad, the alleged mastermind of the September 11 2001 attacks, not Sheikh.
Mohammed -- better known as KSM -- was arrested in Pakistan in 2003 and is being held in Guantanamo Bay.
A US psychologist who interviewed KSM said the prisoner had told him that he had beheaded Pearl.