Pakistan has already suspended two cross border trains , Samjhauta Express and the Jodhpur-Karachi Thar Express.
The bus service was first started in February 1999 but suspended after the 2001 Parliament attack. It was restarted in July 2003.
The move is in line with the decisions taken during a meeting of the National Security Committee (NSC) held on Wednesday, Pakistan Minister for Communications and Postal Services Murad Saeed said.
"In line with the decisions of NSC Pak-India bus service is suspended," Saeed tweeted on Friday.
The Lahore-Delhi bus service is operated from Ambedkar Stadium terminal near Delhi Gate. DTC buses ply every Monday, Wednesday and Friday and Pakistan Tourism Development Corporation (PTDC) buses every Tuesday, Thursday & Saturday, from Delhi to Lahore.
For the return trip, DTC buses leave Lahore every Tuesday, Thursday, and Saturday whereas the PTDC buses are available every Monday, Wednesday, and Friday.
Earlier, Pakistan Minister of Railways Sheikh Rasheed Ahmad had announced on Friday that it will suspend the Thar Express train service with India which links the two countries across the Rajasthan border, a day after it stopped the Samjhauta Express following its decision to downgrade bilateral ties.
On Thursday, Pakistan suspended the Samjhauta Express train service with India.
India on Monday revoked Article 370 of the Constitution to withdraw the special status given to Jammu and Kashmir and bifurcated the state into two Union Territories - Jammu and Kashmir, and Ladakh.
In reaction to India's move, Pakistan downgraded the diplomatic relations by expelling the Indian High Commissioner and suspended trade ties with New Delhi.
(With PTI inputs)