Lai, an outspoken critic of China's ruling Communist Party who founded the now-defunct Apple Daily, was found guilty in December of conspiracy to collude with foreign forces and conspiring with others to publish seditious articles.
His Hong Kong legal team told The Associated Press via a text message about the decision on Friday, which ends a years-long legal battle. The lawyers would not comment on the reason for not appealing.
"We can confirm we have clear and definitive instructions not to lodge an appeal against conviction or sentence," they said.
Observers say his conviction reflected the decline of press and other freedoms that has changed Hong Kong, a former British colony that returned to China's control in 1997.
The government insists the case has nothing to do with a free press, saying the defendants used news reporting as a pretext for years to commit acts that harmed China and Hong Kong.
Lai was one of the first prominent figures to be arrested under the security law in 2020.
Within a year, some of Apple Daily's senior journalists also were arrested, and the newspaper, known for its critical coverage of both the Beijing and Hong Kong governments, shut down in June 2021.
Lai is 78, and his lengthy sentence raised concerns that he could spend the rest of his life in prison.
After the sentencing, the children of Lai said a possible visit by US President Donald Trump to Beijing could be crucial in securing the release of their father, a British citizen.
After Lai's verdict, Trump, who had raised Lai's case with China, said he felt "so badly".
The White House has confirmed Trump will travel to China on March 31 through to April 2 to meet Chinese leader Xi Jinping, although there is no official confirmation from Beijing so far.
Chinese and Hong Kong authorities have defended Lai's sentencing, saying it reflected the spirit of the rule of law.
Wilson Chan, co-founder of the Pagoda Institute, a think tank focusing on public policy and the global political economy, said Beijing had previously granted medical parole to mainland prisoners but Hong Kong had no such provision, so one potential path for Lai's release could be a pardon from the city leader under a diplomatic solution.
Chan suggested not appealing may be a basic requirement to satisfy Beijing for any such solution, but it doesn't guarantee anything.
He predicted the chance of a diplomatic solution from a Trump-Xi meeting would be slim.
Last week, Lai won an appeal to quash his convictions and sentence in a separate fraud case, a rare victory in his legal battles.
That ruling could reduce his total prison time. But the government earlier said the Department of Justice would study the judgment thoroughly and consider whether to appeal.
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