The decision came after the ICC's executive board held a teleconference to discuss the possibility of moving the biennial tournament because of security fears raised by Australia, England and New Zealand.
"The Champions Trophy will stay in Pakistan and we thank all member countries for their kind support," Pakistan Cricket Board (PCB) chairman Naseem Ashraf told a news conference.
"The ICC will be appointing a special taskforce to ensure that the implementation of the recommendations of the (ICC-commissioned) security report are indeed being met," Ashraf said.
The ICC confirmed the decision in a brief statement.
"The decision of the board is that the event remains in Pakistan," the ICC press release said, adding that further details would be released soon.
The year's biggest one-day tournament, featuring the top eight one-day nations, is due to be held in Pakistan from September 11 to 28, with Australia as the defending champions.
Ashraf said the security commission would comprise ICC president David Morgan, vice president Sharad Pawar, chief executive Haroon Logart, principal advisor Inderjeet Bindra and himself.
It would also feature a representative from the tournament's official broadcasters, ESPN-Star, and a member of the Federation of International Cricketers' Association, he said.
"Let me assure to you that it was a correct decision by the ICC keeping in mind that there should be unity in cricket," Ashraf added.
Pakistan's fate as tournament host was left hanging in the balance on Sunday after a security briefing in Dubai featuring all participating nations decided to wait for the ICC teleconference to announce a decision.
Players from Australia, England and New Zealand had raised security concerns with Australian Cricketers' Association chief executive Paul Marsh Wednesday saying there were credible threats in all major Pakistani cities.
Pakistan is fighting Taliban and Al-Qaeda militants in its northwestern tribal regions bordering Afghanistan and has suffered a string of deadly suicide bomb attacks in the last year which have killed more than 1,000 people.
ICC delegates at Sunday's meeting were briefed over security arrangements made during the incident-free six-nation Asia Cup competition which Pakistan hosted from June 24 to July 6.
However, a bomb blast in the capital Islamabad on July 6 killed 19 people, mostly police, and there was a series of minor blasts in Karachi the following day which killed one person and wounded dozens.
Rawalpindi, which adjoins Islamabad, is one of three venues for the Champions Trophy along with Lahore and Karachi.
Several foreign teams have refused to tour Pakistan since the September 11, 2001 attacks on the United States and the ensuing US-led invasion of Afghanistan to topple the Taliban regime.
Pakistan had to relocate two of its home series to Sri Lanka and Sharjah after the West Indies and Australia refused to tour in 2002.
New Zealand also had to cut short a tour of Pakistan after a bomb blast outside their hotel in Karachi killed 19 people, including 14 French naval staff, in May 2002.
Australia also postponed a full tour of Pakistan in March-April this year due to the security situation. However, they agreed to reschedule the tour in two visits -- one-dayers in 2009 and Tests in 2010.
Australia are due to defend the title they won in 2006 against the West Indies. Hosts Pakistan, South Africa, the West Indies, England, India, Sri Lanka and New Zealand are the other teams taking part.
Ashraf said Pakistan was committed to providing full security.
"We are committed to providing the kind of security which we have promised to the ICC and very soon the taskforce will tour Pakistan to ensure everything is in place," he said.
"The taskforce will meet the high officials of the government and since there were concerns raised by some players of the member countries we will do everything to ensure that the best security is provided to all the stakeholders."