The cabinet decision to reinstate the requirement drew criticism from a secular political party and a human rights campaigner who said the government had caved in to pressure.
"The cabinet today decided to restore the religion column in passports," Information Minister Shaikh Rashid Ahmad said, after a meeting led by Prime Minister Shaukat Aziz on Thursday.
The row was the latest to pit conservatives and more liberal elements in Pakistan, including the president, General Pervez Musharraf, who has called for a society of "enlightened moderation".
President Musharraf's decision
was criticised by secular politicians
The government deleted a column for religion in new, machine-readable passports, issued for the first time in October, but the decision enraged conservatives who saw it as a threat to Pakistan's identity as an Islamic state.
Thousands of conservative Muslims, many of whom also oppose Musharraf's support for the US-led war on terrorism, took to the streets in rallies to denounce the move.
They accused Musharraf of dropping the religion column at the behest of the United States and to enable Ahmadiyas, a dissident Islamic sect declared non-Muslim and heretical in Pakistan in 1974, to visit Islam's holy cities in Saudi Arabia.
Secular politicians and rights activists criticised Thursday's decision, saying it would encourage conservatives to make more demands.
"The most tragic aspect of this is that he has done it under the pressure of obscurantist and extremist forces"
former Law Minister
"The most tragic aspect of this is that he has done it under the pressure of obscurantist and extremist forces," Iqbal Haider, a former law minister and secretary-general of the private Human Rights Commission of Pakistan, said, referring to Musharraf.
"Once you withdraw a positive decision, it encourages the militant and extremist forces to press ahead with their other reactionary demands."
The party of former prime minister Benazir Bhutto also denounced the decision, saying the government was "allowing bigots and fanatics information they could use to harass, discriminate and otherwise mistreat minorities".
About 95% of Pakistan's 150 million people are Muslim and many are moderate, but conservative religious leaders wield significant influence in some sections of society.