Liu, a strong contender for a gold medal, took the decision primarily because of the weather, his coach Sun Haiping said.
"Other Chinese teams have also chosen to move their base thanks to London's cold weather, so Liu Xiang is not the only one," Sun said.
Liu experienced the English summer first-hand while competing in the London GP at Crystal Palace last weekend, a tune-up event for the Games.
He negotiated his heat in cool conditions before withdrawing from the final, citing muscle pain.
Liu, 29, had also been a heavy favourite for gold at his home Olympics in 2008, but had to pull out with an Achilles injury and has subsequently struggled with knocks and niggles.
But Sun Haiping has insisted that despite this late change to his preparations, Liu "will be sure to fight to the end".
Liu's coaching team had also reportedly considered relocating to Leeds, which China has chosen as its training base.
But the Shanghai Morning Post said feedback suggested that conditions at the Leeds training camp "did not quite fit what Liu Xiang needs either”.
Britain is on course for the worst summer in living memory, with warm, sunny days able to be counted on the fingers of one hand so far.
Physiologist Steve Ingham of the English Institute said for the short, powerful, explosive events such as track sprints, the muscles need to be warm because their contraction is then more efficient.
"They would not necessarily be dramatically slow but they would not be optimally fast," if the weather was cold or wet, he said.
In contrast, the cold should help marathon runners because they will not accumulate heat at such a great rate.
Bookmakers William Hill are factoring in the weather in the odds it is offering, saying it expects fewer records to be broken in London because of the miserable weather.
It has also slashed the odds on the likelihood of rain falling during the opening ceremony on July 27 from 4-1 to even money after a weather forecaster placed a £250 bet.
However, there may be some good news for organisers fearing soggy sandpits in the Olympic Stadium, muddy equestrian courses and howling gales at the sailing regatta.
"There are signs that by the end of this week we should have normal summer weather," said Met Office forecaster Helen Chivers.
"Certainly we are not expecting a heatwave, but the shift in the weather pattern means there will be more of the traditional north west, south east divide.
"The south of Britain should have higher pressure and lighter winds by the end of the week and that could be the case for next week too, although it's too early to predict exactly what we can expect on the first weekend of the Games."
"I've heard reports of hot sunshine, but I think that's maybe a bit over-enthusiastic. We should have longer dry spells and more normal temperatures though."