Following pressure from Shahzad's family, a judge ordered the exhumation of the body.
Shahzad was reported missing while driving from his home to a TV station in the heart of Islamabad on Sunday evening, two days after he authored an article in which he alleged that Al Qaida had infiltrated the Pakistan Navy.
His body, bearing marks of torture, was found entangled in a net in a canal in Mandi Bahauddin district, 200 km from Lahore, on Monday.
Local police sent the body to a state-run hospital for an autopsy and hurriedly buried it, saying it was "unidentified" despite finding a press identity card.
Maulvi Muhammad Arshad, who prepared the body for burial, told Geo News channel today that two police officials pressured him to quickly bathe the body and bury it.
Following pressure from Shahzad's family, a judge ordered the exhumation of the body. Footage on television showed the body being dug out of the grave late last night.
"Unusually quickly for Pakistani police, all legal formalities were completed, the autopsy was conducted on the unidentified body and it was handed over to Edhi Centre for burial," The Dawn newspaper reported.
He was buried in Karachi today after his body was brought from Islamabad. Hundreds of mourners, including fellow scribes attended the funeral of the slain journalist.