The 2nd Century piece, depicting Buddha’s footprints alongside religious symbols, was stolen in the 1980s from the Swat Valley and eventually smuggled into the US.
A Japanese antiques dealer who brought it to the US from Tokyo pleaded guilty to possessing stolen property in April.
The sculpture was expected to reach $1m (£700,000) at auction, but the sale was intercepted by New York authorities.
New York prosecutors returned the sculpture to Pakistan’s Deputy Chief of Mission Rizwan Saeed Sheikh at a ceremony on Wednesday.
