The district and sessions judge here had earlier issued death warrant for the convict, Khizar Hayat, for July 28.
However, the prisoner's mother filed a stay application through Justice Project Pakistan (JPP), a non-government organisation working for prisoners' rights, in the district court, which yesterday stayed the hanging.
JPP's counsel Sara Belal had told the judge that the jail authorities in 2008 diagnosed that Hayat, 41, had been suffering from paranoid schizophrenia.
Hayat, who was a police constable, was arrested in 2001 for killing a fellow policeman. A trial court awarded him death sentence in 2003.
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The Lahore High Court division had earlier decided the matter of Hayat's mental health and allowed the execution after the jail officials told the court that at the time of filing mercy petition before the President, the medical examination of the condemned prisoner was conducted and he was found fit.
Executions in Pakistan resumed in December last year, ending a six-year moratorium, after Taliban fighters gunned down 154 people, most of them children, at a school at Peshawar.
Hangings were initially reinstated only for those convicted of terrorism offences, but in March they were extended to all capital offences.
More than 8,000 prisoners are on death row in Pakistan and about 160 convicts have been executed since the Nawaz Sharif government lifted moratorium on death penalty.