Pakistan's Supreme Court has ordered the British-born man acquitted of the beheading of American journalist Daniel Pearl in 2002 off death row and moved to a so-called government "safe house".
Ahmed Omar Saeed Sheikh, who has been on death row for 18 years, will be under guard and will not be allowed to leave the safe house, but his wife and children will be allowed to visit him.
"It is not complete freedom. It is a step towards freedom," said Mr Sheikh's father, Saeed Sheikh, who attended the hearing.
The Pakistan government has been scrambling to keep Mr Sheikh in jail since a Supreme Court order last Thursday upheld his acquittal over the death of Mr Pearl, generating expressions of outrage by Mr Pearl's family and the US administration.
In a final effort to overturn Mr Sheikh's acquittal, the Pakistan government, as well as the Pearl family, have filed an appeal to the Supreme Court to review the decision to exonerate Mr Sheikh of Mr Pearl's murder.
The Pearl family lawyer, Faisal Sheikh, earlier said a review has a slim chance of success because the same Supreme Court judges who ordered Mr Sheikh's acquittal sits on the review panel.
The US government has said that it would seek Mr Sheikh's extradition if his acquittal is upheld.
Mr Sheikh has been indicted in the United States on Mr Pearl's murder as well as over a 1994 kidnapping of an American citizen in Indian-ruled Kashmir. The American was eventually freed.
The order sending Mr Sheikh to a safe house would seem to be a concession to the federal government, as well as the government of southern Sindh province where Karachi is the capital. The Sindh government has refused successive orders to release Mr Sheikh, even courting contempt charges from lower courts.
In the government-run safe house, Mr Sheikh will be under a 24-hour guard - often military personnel - and will not be allowed to leave the house. Pakistan's security establishment has several such facilities across the country.
Mr Pearl disappeared on January 23 2002, in the port city of Karachi where he was investigating links between Pakistani militant groups and Richard C Reid, dubbed the "shoe bomber" after his attempt to blow up a flight from Paris to Miami with explosives hidden in his shoes.
Mr Pearl's body was discovered in a shallow grave soon after a video of his beheading was delivered to the US consulate in Karachi.
The Pentagon in 2007 released a transcript in which Khalid Sheikh Mohammad, the alleged mastermind of the 9/11 attacks on the United States, said he had killed Mr Pearl.
Mr Sheikh had long denied any involvement in Mr Pearl's death, but Pakistan's Supreme Court last month heard that he acknowledged writing a letter in 2019 admitting a minor role - raising hopes for some that he might remain behind bars.
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