Justice Faisal Arab, the chief of the three-member bench conducting the treason trial against 70-year-old Musharraf recused himself from the hearing.
"Better late than never. I am glad that his (Justice Arab) conscience has finally risen," Ahmed Raza Kasuri, a lawyer of Musharraf told reporters outside the special court.
He added, "Faisal Arab said he is distancing himself from the case. There is no shortage of judges in the country".
It was not immediately clear whether the government would form a new bench after a fresh notification is issued or if one of the two remaining judges would become the chief and continue with the hearing.
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It is also uncertain whether Musharraf would appear before the court on March 31, the day he has been summoned.
The court had also issued a non-bailable warrant that would come into force if Musharraf does not appear before it on his own volition.
During today's hearing, another of Musharraf's lawyers Anwar Mansoor said the court had accepted that his client was facing security risks but had still issued a warrant.
He said that he is not satisfied with the way the case is being processed.
Justice Arab said if the defence lawyers think that the judges are not impartial then he would disassociate himself from the bench.
It is not the first time the defence has accused the bench and the prosecution team of bias. They have filed numerous petitions challenging the legality of the bench and accusing the judges of bias.