Gula, who was immortalised after her haunting picture taken at a refugee camp in Pakistan in 1985 was carried by the magazine on its cover and became a symbol of her country's wars, was arrested on October 26 from her home.
A special anti-corruption and immigration court in Peshawar ordered Gula's deportation to Afghanistan on Friday after serving a 15-day jail sentence besides slapping a fine of 1,10,000 rupees (USD 1,100).
Gula will complete her sentence on Wednesday.
She will not be deported from Pakistan, Khyber Pakhtunkhwa government official Shaukat Yousafzai said.
The provicncial home department has also stopped implementation of the decision to deport her.
Pakistan Tehreek-i-Insaf chairman Imran Khan requested KP Chief Minister Pervez Khattak to not deport Sharbat Gula.
The decision was taken on humanitarian grounds and as a goodwill gesture towards Afghanistan.
Gula, who was dubbed as 'Mona Lisa of Afghan war', was arrested by the Federal Investigation Agency (FIA) for alleged forgery of a Pakistani Computerised National Identity Card (CNIC).
She gained worldwide recognition when her image was featured on the cover of the June 1985 issue of National Geographic Magazine at a time when she was approximately 12 years old.
According to interim charge sheet submitted on November 1, the prosecutor said that she accepted the main charge of faking her identity to get the CNIC.
Gula said that her late husband, Rehmat Gul, had earlier made a manual national identity card in 1988, which was used to get the CNIC with the help of an agent who was bribed.
The FIA also registered an FIR on October 20 against three former government employees for fraudulently issuing Pakistani CNICs to Afghan nationals, including Gula.
Pakistan has been tackling the Afghan refugee crisis for over three decades. It is estimated that some three million Afghan refugees are living in Pakistan, half of whom are unregistered.