He had been incarcerated at Jinzhou Penitentiary in Liaoning Province, his home province, before being moved to the hospital for treatment.
"The global community can see that China has no human rights when even Nobel prize winners have been treated like this", Beijing-based lawyer Yu Wensheng said, adding that when Liu dies it will be "a heavy blow" for China's human rights movement. "You need medical parole for that".
A spokeswoman for the U.S. embassy in Beijing said they were "working to gather more information" about Liu's legal and medical status.
Liu Xiaobo is a hero to many - but a villain to his own government.
"I don't think he will be allowed to meet with people other than close relatives", he added.
Student leader Joshua Wong (second from left) chants slogans during a protest demanding the release of Nobel rights activist Liu Xiaobo outside China's Liaison Office in Hong Kong, June 27, 2017.
According to the Nobel Prize website, the manifesto advocated the gradual shifting of China's political and legal system in the direction of democracy. "Many people in China are asking His Holiness the Dalai Lama to pray for Liu Xiaobo, to help him fight off the evil spirit of cancer".
Liu still commands great respect among Chinese intellectuals, a fact that some say was central to the Communist Party's decision to bring charges against him. "Those who have done evil will sooner or later be held accountable, and written into the history to be spat on forever".
The aid group calls for the government to ensure Liu has proper medical care, access to his family - and that he and other rights activists are released. "Life and dignity should be first and foremost in this case", Guo said.
Messages seen by reporters from another lawyer for Liu, Shang Baojun (尚寶軍), confirmed the news.
Liu was put on trial for subversion, and the worldwide community has been calling for his release since his sentencing.
In the text written before his sentencing, Liu said he felt no hostility towards his jailers and said he hoped "to counter the regime's hostility with utmost goodwill, and to dispel hatred with love".
Associated Press journalists Isolda Morillo and Mark Schiefelbein contributed to this report.
Liu, 61, who has about three years of his 11-year sentence to serve, was diagnosed on May 23 and released days later, his lawyer Mo Shaoping said. Poon also called for the Chinese authorities to release Liu Xia from house arrest.
Mo has not visited Liu in the hospital, because of a deal he made with Chinese authorities to not represent the dissident further after defending him during his appeal.