Hussain was hanged shortly before dawn for killing a seven-year-old boy in 2004, his brother and a prison official told AFP. Authorities allowed Shafqat to meet his family for the last time before he was hanged amid tight security.
"Why did they hang my innocent brother, only because we were poor?" said his sister Sumaira Bibi, beating her chest and weeping.
His mother Makhni Begum, looked glassy-eyed, stunned by the news of the execution after seeing her son reprieved from the gallows four times since January.
"My son was innocent, only Allah will prove his innocence in his court," she told AFP.
"We can't do anything but they (executioners) will face Allah on the day of judgement."
His case drew international attention as his lawyers and family claimed he was only 15 at the time of the killing and was tortured into confessing.
Earlier on Monday, the Sindh government had forwarded a request to the federal government seeking to halt Shafqat’s execution. The request was sent by the Sindh Home Department to the Ministry of Interior seeking a probe into this case by the Supreme Court.
Read: Sindh govt requests interior ministry to halt Shafqat Hussain's execution
United Nations rights experts have said his trial "fell short of international standards" and urged Pakistan to investigate claims he confessed under torture, as well as his age.
AJK president urged President Mamnoon Hussain late on Monday to postpone the execution to allow further inquiries, but the hanging went ahead as planned.
Read: AJK president seeks reprieve for Shafqat
"Shafqat Hussain was hanged 10 to 12 minutes before dawn prayers today," a prison official told AFP, speaking on condition of anonymity.
He was originally due to face the noose in January but won four stays of execution as his lawyers fought to prove he was under 18 at the time of his offence and could therefore not be executed under Pakistani law.
A government-ordered probe to determine Hussain's age, carried out by the Federal Investigation Agency, ruled he was an adult at the time of his conviction.
Read: Shafqat Hussain dressed in white for hanging before last-minute stay
Pakistan has hanged around 180 convicts since restarting executions in December after Taliban militants massacred more than 150 people at a school, most of them children.
A moratorium on the death penalty had been in force since 2008 and its end angered rights activists and alarmed some foreign countries.
Shafqat, the youngest of seven children, was working as a watchman in Karachi in 2004 when the seven-year-old boy went missing from the neighbourhood.
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