Three others accused in the case were given 25 years in prison each.
"The judge has convicted Shaikh Omar of murder, conspiracy and abduction charges while the three other accused have been sentenced to life imprisonment," chief prosecutor Raja Qureshi said on state television, referring to Ahmed Omar Saeed Shaikh.
"We are seeking death sentence for the other three -- Salman Saqiub, Shaikh Adil and Fahad Naseem -- too. We are waiting for the government's advise to file a review petition," he added.
Pearl's former employer said the verdict was a step in the right direction.
"We continue to mourn Danny Pearl. And we continue to hope that everyone responsible for his kidnapping and murder will be brought to justice. Today's verdict is one step in that direction," Steven Goldstein, vice president, Dow Jones & Co., which publishes The Wall Street Journal, said in a statement.
Outside the heavily guarded Hyderabad facility where the anti-terrorism court announced the verdict, Omar's defense lawyers told reporters they would appeal the sentence. They have seven days to file an appeal in a higher court.
Speaking from the Hyderabad prison just minutes after his client was sentenced, Raja Bashir, Shaikh's defense attorney, accused the United States of being "anti-Muslim." He called the court "(Pakistan President Pervez) Musharraf's puppet."
Bashir also said that not only was the evidence flimsy, he was confident it would be reversed on appeal to the Sindh high court.
While announcing the judgment, Judge Ashraf Ali Shah collectively fined the four accused two million rupees (about $33,500). The money, he said, will be given to Pearl's widow, Mariane.
Pakistan had made extraordinary security arrangement for the ruling as authorities feared a violent reaction from Muslim extremists.
Police Brig. Mohammed Moazzad cited security concerns around the prison. He said streets had been blocked off for a 5-block radius and 500 national guardsmen were called in to secure the prison and its 2,000 inmates.
Pearl, the Bombay, India, bureau chief for the Wall Street Journal, was kidnapped Jan. 23 while investigating a story on the suspected shoe bomber Richard Reid.
In e-mail sent to Pakistani and Western news outlets, Pearl's kidnappers identified themselves as members of a previously unknown group, the National Movement for the Restoration of Pakistani Sovereignty. They demanded better treatment for Taliban and al Qaida prisoners at the U.S. naval base in Guantanamo Bay, Cuba.
In February, the U.S. Consulate in Karachi received a videotape confirming Pearl's death.
Shaikh and his co-defendants denied involvement in the kidnapping and accused the prosecution of fabricating charges against them to appease the Americans. Shaikh had earlier admitted a role in the kidnapping but later recanted.
The trial began April 22 in Karachi but was moved to Hyderabad, about 60 miles north, after prosecutors said they received death threats.
Prosecutors alleged that Shaikh, a former student at the London School of Economics, lured Pearl to a Karachi restaurant on Jan. 23 and drove him away to an unknown location for a meeting with an Islamic extremist leader. The Wall Street Journal reporter was never seen again.
Later, the FBI traced the e-mail sent to news outlets about Pearl's kidnapping to one of the co-defendants, Fahad Naseem. Naseem told police he had sent the e-mail on Shaikh's advice.
Pearl's abduction was the first of five attacks against foreigners in Pakistan since November, when U.S. forces defeated the Taliban in Afghanistan. A grenade attack on a church in Islamabad on March 17 killed five people, including a U.S. diplomat and her daughter.
A car bomb in Karachi on May 8 killed 14 people, including 11 French navy engineers.
On June 14, a car bomb at the U.S. Consulate in Karachi killed 12 Pakistanis, including one embassy guard and one policeman.
On Saturday, a dozen people, including seven Germans, were injured in an apparent grenade attack on a tour bus north of Islamabad.
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