The detention order is struck down, said Faisal Siddiqi, the Pearl family lawyer.
Sheikh will be freed until the appeal is completed, he said, but will be returned to prison if the family is successful in overturning the acquittal.
Sheikh was sentenced to death and three others were sentenced to life in prison for their role in the plot.
Daniel Pearl, 38, was abducted, his throat cut and then he was beheaded, before the footage was sent to the American Embassy
But a lower Pakistani court in April acquitted him and three others, a move that stunned the US government, Mr Pearl s family and journalism advocacy groups.