Musharraf's claim, made in his memoirs released this week, could now be used to try to clear Ahmed Omar Saeed Sheikh, one of Pearl's four convicted killers, who is appealing against his death sentence.
The president accuses Khalid Sheikh Mohammed of taking part in Pearl's killing in Karachi, after his kidnapping.
Musharraf said: "The man who may have actually killed Pearl or at least participated in his butchery, we eventually discovered, was none other than Khalid Sheikh Mohammed, al-Qaeda's number three."
Some US officials and Pearl's newspaper, The Wall Street Journal, had previously suggested that Mohammed had killed the journalist.
Mohammed was arrested in Pakistan in 2003, and is in US custody in Guantanamo Bay.
Rai Bashir, the lawyer for British-born Pakistani Sheikh, said he would petition the Sindh High Court in Karachi within 10 days to let him introduce Musharraf's book as evidence in his client's appeal case, which began in January 2003.
Sheikh and three other militants were convicted in July 2002 of killing Pearl. All have since appealed.
Bashir said he would try to use Musharraf's book to highlight contradictions in the prosecution's case against Sheikh, who has been sentenced to death.
He said Musharraf referred to two men never charged in the Pearl killing, Mohammed and another detained suspect, Fazal Karim.
Musharraf said in his memoir that Mohammed, a joint Pakistani-Kuwaiti citizen, admitted after being captured to participating in Pearl's killing.
Zachary Katznelson, senior counsel for the UK human rights charity Reprieve, said: "Whatever President Musharraf knows about Omar Sheikh and the murder of Daniel Pearl, the president needs to reveal it fully.
"It now appears that an innocent man may be facing execution for a crime he did not commit."
Payment for prisoners
The Pakistan president also throws light on his country's attempts to catch al-Qaeda members after the September 11 attacks in the United States.
Musharraf said: "We have played cat and mouse with them. The biggest of them all, Osama bin Laden, is still at large at the time of this writing, but we have caught many, many others."
He said America had paid millions of dollars to Pakistan to secure those caught.
Musharraf said: "We have captured 689 and handed over 369 to the United States. We have earned bounties totalling millions of dollars.
"Those who habitually accuse us of 'not doing enough' in the war on terror should simply ask the CIA how much prize money it has paid to the government of Pakistan."