Balwant Singh Rajoana’s hanging, which had been set for Saturday, was postponed after a mercy petition to the president, the Home Ministry said.
Several opposition parties and Sikh groups had called a strike demanding a halt to the impending execution.
If carried out, the execution would be the first in India since 2004.
Rajoana, who was sentenced in 2007, has not appealed against the sentence, although other convicted co-conspirators have had their death sentences reduced on appeal.
The Press Trust of India news agency said the hanging had been stayed following a mercy petition by top Sikh religious body the Shiromani Gurudwara Prabandhak Committee (SGPC) to President Pratibha Patil.
PTI quoted a letter from the Home Ministry to the Punjab government detailing the reasons for the stay of execution, describing the postponement as procedural to allow petitions for mercy to be decided on.
Only India’s president or the Supreme Court can stop an execution.
Executions are rare in India where hundreds of convicts are awaiting the death penalty, including the killers of former Prime Minister Rajiv Gandhi.