Judges have accepted an application by the Lockerbie bomber to drop his second appeal against conviction.
The permission of the High Court in Edinburgh was required before the proceedings by Abdelbaset Ali al-Megrahi could be formally abandoned.
It comes as the Scottish Government considers his requests for either release or transfer to a Libyan jail. (...)
The Libyan's legal team outlined his current state of health to the appeal hearing.
QC Margaret Scott said: "The court is aware of Mr Megrahi's medical condition in that he has progressive prostate cancer.
"This has now reached the terminal stage and my client's condition has recently worsened very considerably.
"Up-to-date medical reports from three eminent experts also concurred in the view that he has a very aggressive cancer, that his condition is grave and that the prognosis is extremely limited."
By dropping his appeal, Megrahi has removed one potential obstacle to his transfer to a jail in his homeland.
However, a Crown appeal against the length of his sentence is still ongoing.
Scotland's senior law officer, Lord Advocate Elish Angiolini QC, will now have to consider whether that should also be dropped.
A Crown Office statement said its appeal was "entirely separate" from Megrahi's appeal.
It said the lord advocate had not received any request to indicate whether the appeal would continue.
"The lord advocate has always been prepared to give any request her full and prompt consideration," it stressed.
It added that no information had been received about Megrahi's current medical situation which might need to be taken into account in handling the appeal.
Scotland's senior judge, the Lord Justice General, Lord Hamilton, said it was important the Crown appeal issue was resolved quickly.
"It appears to the court to be of the utmost importance that an early decision be made by the lord advocate as to whether she is to insist or not to insist on that appeal," he said.
He added: "The court urges her to reach a decision on that matter without undue delay."
Some relatives of the victims said the dropping of the appeal meant that many questions would now go unanswered.
The Reverend John Mosey, who lost his daughter in the bombing, described it as a "very sad day for Scottish justice".
"My feeling is that I would be happier if he was going home after the hearing of his appeal, either as an innocent man or as a guilty man," he said.
"Either way, my personal feeling is 85% that he is an innocent man - of this crime anyway - having sat through the whole of the trial in Holland."
It emerged last week that the Libyan had applied to withdraw his second appeal against conviction.
It prompted claims he had been put under pressure to make the move - a suggestion the Scottish Government has strenuously denied.
The Justice Secretary is currently considering whether or not to release Megrahi on compassionate grounds or to allow his transfer to a prison in Libya.
He is expected to announce his decision within the next two weeks.
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