The burial took place after his body was brought to Karachi from Islamabad. The 40-year-old journalist's relatives and friends condemned the murder and said he was a thorough professional and an affectionate person.
Shahzad had vanished in Islamabad on Sunday after his piece on the presence of rogue elements in Pakistan Navy bases with links to al-Qaeda appeared on the Asia Times Online.
Shahzad was found dead in Punjab province on Tuesday, May 31 with his body bearing marks of torture.
Shahzad's article contended that al Qaida attacked the naval airbase in Karachi after failed talks with the navy to release some arrested naval personnel who had terror links.
"It is sad and a matter of grave concern for us, the way journalists are being targeted in the line of duty we demand an inquiry into Shahzad's murder and protection for journalists," said Amin Yousuf, a top office bearer of the Pakistan Federal Union of Journalists.
Yousuf said the media around the country would observe two-days mourning for the slain journalist.
Meanwhile, TV channels reported that Shahzad's death occurred due to a blow close to his heart. His lungs were also damaged and they were signs of rope around his neck.
Ashok Kumar, a doctor at the Pakistan Institute of Medical Science in Islamabad, said it was confirmed the cause of death was torture. "His lungs and liver had been damaged."