The environment ministry backed the decision.
Some people in the area said the hippos were dangerous, while other residents claimed that they had learned to live with the animals.
Pepe's killing has consumed the Colombian media and public, and led to protests by animal rights activists, who have been demonstrating outside the environment ministry, demanding the resignation of minister Carlos Costa.
In the face of the massive criticism, the government backtracked on its permission for the killings and was attempting to save Matilda and Pepito.
A theme park some 40 km north of Bogota has offered to take in Pepito, while parks in Costa Rica have offered homes for several other hippos that remain on Escobar's estate.
The environment ministry said it has contacted experts in South Africa and Tanzania, asking them to come to Colombia to provide advice on what to do with the surviving hippos.
When the controversy erupted, Deputy Enviroment Minister Claudia Mora justified Pepe's killing, arguing that hippos transmit diseases and that capturing them and sending them to a zoo was too expensive.
Journalist Juan Lozano, who was environment minister until a few months ago, disagreed: 'It is clear that if they are not in their habitat they can present a risk for the population. But the formula is not to ... kill the hippos.'