The incident occurred in Gujranwala district, 80 km from Lahore.
Khalida Bibi, who is suffering from cardiac and liver ailments, sold her son Faizan yesterday for Rs 1.2 lakh to Mohammad Shaukat, who works in UAE.
"I had no money for my treatment and so I decided to sell my only child," Khalida told reporters.
As the news broke on TV channels, police rushed to stop the illegal deal between Khalida and Shaukat and took them both into custody.