On Tuesday, Ken Macdonald, director of public prosecutions, confirmed that Moscow had offered to hold a trial in Russia, but insisted that London was the "appropriate" venue for the case to be heard.
In a statement, Macdonald said: "The Russian response has now been conveyed to us and the Russian authorities have declined to extradite Andrei Lugovoi."
"They have said that they are prepared to put Mr Lugovoi on trial in Russia if the evidence is forwarded to them.
"The allegation against Mr Lugovoi is that he murdered a British citizen by deliberate poisoning and that he committed this extraordinarily grave crime here in our capital city.
"The appropriate venue for his trial is therefore London."
British prosecutors announced their decision to seek Lugovoi's extradition on May 22.