Pakistan's cultural ministry has agreed to screen two more Bollywood films in the country.
Mughal-e-Azam's producers met Gen Musharraf in the UK last year
The films are Moghal-e-Azam, the 1960 classic starring Dilip Kumar and Madhubala; and Taj Mahal, a 2005 film, starring Pakistani actress Sonia Jehan.
Last month, another Bollywood film, Sohni Mahiwal (1984) was cleared. Authorities say despite waivers, the ban on Bollywood films remain.
Pakistan banned screenings of Indian films in 1965 after a war with India.
Pakistan's censor board chairman, Ziauddin Khattak, said the screening of Moghal-e-Azam had been agreed by the cultural ministry after President Pervez Musharraf's visit to the UK last year.
Bollywood legend Dilip Kumar played Mughal prince Salim
The producers of Moghal-e-Azam met Gen Musharraf on the trip.
They have offered to donate all income from the screening of the film in Pakistan to the survivors of the 8 October earthquake.
The film tells the story of forbidden love between the Mughal Prince Salim and courtesan Anarkali.
Last Saturday, the distributor of the film in Pakistan imported new colour prints from India and submitted them and other details to the censor board.
The board is meeting this Saturday and will look at the details required for clearing the film for screening.
Sonia Jehan made her Bollywood debut in Taj Mahal
The other film, Taj Mahal, stars Pakistani actress Sonia Jehan, who is the grand-daughter of the legendary Pakistani singer Noorjehan.
The details of the film are yet to be put forward before the censor board for final approval.
Mr Khattak emphasised that allowing these two films was a special waiver and that the ban on screening of Indian films was still in place.
Last month, another Bollywood film, Sohni Mahiwal, made in 1984, was cleared by the censor board and the government on the basis that it was based on popular Punjabi folklore. The film is scheduled to be released in April.
Film exhibitors and distributors in Pakistan have welcomed the latest decision of the cultural ministry.
Jahanzeb Beg, chairman of the Film Exhibitors Association, said: "It will go a long way in saving the cinema industry and hopefully the government will allow more Indian films to be screened in future."
Cinema owners in Pakistan are keen to screen Bollywood films, but the nation's filmmakers fear an influx would destroy Pakistan's film industry.