Hearings will now be held in Hyderabad's central jail
The chief prosecutor in the case had said witnesses and the prosecution team were being threatened by defendants at the trial, which began a week ago.
The Sindh High Court also agreed to a request for the trial judge to be replaced.
Daniel Pearl, who worked for the Wall Street Journal, went missing in January in Karachi.
A video was later sent to US diplomats showing him being killed.
Judge replaced
Requesting the change of judge, Chief Prosecutor Raja Qureshi had said Judge Abdul Ghafoor Memon was unwilling or unable to stop the defendants from making threatening gestures to himself and his witnesses.
A new judge, the trial's third, will preside when proceedings resume on 3 May.
Judge Memon had already replaced Arshad Noor Khan, who was removed after defence arguments that he was not impartial.
All four defendants - including chief suspect Ahmed Omar Saeed Sheikh, a British-born former public schoolboy - have pleaded not guilty to charges of murder, kidnapping and terrorism.
They face the death penalty if convicted. Seven other suspects have been charged but remain at large.
Security 'inappropriate'
Mr Qureshi told the High Court the government had received reports that Omar Sheikh's supporters were planning to blow up the Karachi jail in order to free the defendants.
"I also said the Karachi jail security was inappropriate," Mr Qureshi said.
Two police officers have also testified that they heard Omar Sheikh admit his role in the kidnapping.
The first judge, Judge Khan, was also present at the pre-trial hearing when Omar Sheikh made the comments, not under oath, which he later retracted.
Judge Khan was removed after the defence argued that the fact he had heard the comments effectively made him a witness.