Qari Hashim alias Haris was arrested in 2008 for his alleged involvement in kidnapping and murder of Daniel Pearl, the South Asia bureau chief of the Wall Street Journal.
Pearl was kidnapped and slain in Karachi on January 23, 2002.
The counsel of the accused Hashim had filed plea for his acquittal. The court freed the suspect due to lack of evidence.
An anti-terrorism court had heard Daniel Pearl murder case in Central Jail Hyderabad in July 2002. The court handed death sentence to key accused Ahmed Omer Sheikh, while co-accused Shaikh Adil, Fahad Naseem and Salman Saqib, were awarded life imprisonment.