Authorities in Pakistan's central Punjab province on Thursday cancelled the hanging of a convicted sectarian militant after the victim's family pardoned him, officials and a family member said.

The case is seen as a test of the government's plan to execute convicted terrorists in the aftermath of a school massacre that claimed 150 lives in the country's deadliest terror attack.

The stay of execution came as a roadside bomb killed four Pakistani security officials in a region where the military has been battling Taliban and Al-Qaeda militants for more than a decade.

The pardoned militant, Ikramul Haq, is a member of banned Sunni militant outfit Lashkar-e-Jhangvi who was sentenced to death by an anti-terror court in 2004 for killing a Shiite Muslim three years earlier.

He was set to be hanged in the eastern city of Lahore early Thursday but his family came to a deal with the victim's relatives on Wednesday night, Haq's lawyer, Ghulam Mustafa Mangan, told AFP.

"The hanging was cancelled after we reached a compromise with the complainant's family. They have pardoned my client," Mangan said, without giving further details of the deal.

Murder can be forgiven under Pakistani law in exchange for blood money, while rival militant groups may chose to pardon each others' convicted killers.

Ehsanul Haq, brother of Ikramul Haq, confirmed the cancellation of the hanging.

A senior prison official also confirmed the move, adding: "A magistrate has recorded the statements and the execution has been stayed. Now the court will decide whether the person (should) be acquitted or not."

Pakistan last month lifted a six-year moratorium on the death penalty in terror cases in the wake of the Taliban's horrific massacre at an army-run school in the city of Peshawar, and has so far executed nine people.

The attack on December 16 left 150 people dead, the vast majority of them children.

Pakistani officials have said they plan to hang 500 convicts in the coming weeks, drawing protest from international human rights campaigners.

Also Thursday, a roadside bomb ripped through a vehicle carrying three paramilitary troops and a policeman in the restive northwestern Kurram tribal district, highlighting the parlous state of security, highlighting ongoing insecurity in the region.

"An improvised explosive device planted along the roadside went off as a vehicle of paramilitary Frontier Corps (FC) passed by, killing three FC men and one local tribal police official," a senior government official told AFP.

The attack took place in the Thal area of the Lower Kurram tribal district along the Afghan border, which is rife with Taliban attacks and violence between Shiite and Sunni Muslims.