Photo Liu Xiaobo, the Chinese dissident who received the Nobel Peace Prize for his writings promoting democracy, in an undated photo released by his family in 2010.
The democracy campaigner was being treated at a hospital in the northeastern city of Shenyang.
The police arrested Mr. Liu, and a year later, he was convicted of "inciting subversion of state power" and sentenced to 11 years in prison.
In 2010, while in prison, Liu was awarded the Nobel Peace Prize for "his long and non-violent struggle for fundamental human rights in China".
"When a prison clinic is unable to deal with an inmate's medical condition, the authorities can approve outside treatment in accordance with law", said Liu's lawyer, Mo Shaoping, Monday.
Rights group Amnesty International also confirmed the news of Liu's illness in a tweet. Liu was diagnosed on May 23, Mo said.
The following year, he was awarded the Nobel Peace Prize by the Norway-based Nobel committee, a move that has greatly angered the Chinese government.
Asked about Liu's release, foreign ministry spokesman Geng Shuang told a regular news briefing: "I am not aware of the situation you're talking about".