"It is appropriate to make a finding of non-compliance by Libya with the court's requests for cooperation at issue and refer the matter to the Security Council," the court said in a statement.
Seif, 42, is the subject of a legal tug-of-war between Tripoli and the ICC over where he should stand trial on charges of crimes against humanity relating to the bloody repression of the 2011 uprising that toppled and killed his father.
Prosecutors say that as part of his father's "inner circle", Seif "conceived and orchestrated a plan to deter and quell, by all means, the civilian demonstrations against Kadhafi's regime".
A one-time de facto prime minister, Seif was nabbed by rebel fighters in November 2011.
Although he is being held by a Libyan militia in northern hilltop stronghold Zintan rather than by any central authority in the chaos-wracked country, The Hague-based ICC said in May that Tripoli must hand him over.
The ICC said on Wednesday that it "recognised that throughout the proceedings, Libya demonstrated in several respects its commitment to the court and made genuine efforts to maintain a constructive dialogue."
"The chamber also noted the volatile political and security situation in Libya and stated that it was sensitive to the serious difficulties that Libya is currently facing."
The Security Council referred the situation in Libya to the ICC in February 2011 amid Kadhafi's repression of the popular uprising against his decades-old regime at the height of the Arab Spring.
Signup to our newsletter and follow us on Facebook and Twitter!
The ICC said its move was not intended "to sanction or criticise Libya but solely to seek the assistance of the Security Council to eliminate the impediments to cooperation."
Authorities in Tripoli are unable to obtain the transfer of Kadhafi's one-time heir apparent to the Libyan capital from his prison in Zintan, southwest of the capital.
The court on Wednesday also asked the Security Council to oblige Tripoli to hand over documents seized in Zintan from an ICC team that went to meet Seif in June 2012.
The team of four was detained and released in July 2012.
The ICC in July rejected a Tripoli request for more time, saying the failure to hand Seif over or try him was "not contingent on the emerging security situation."
More than three years after Kadhafi's downfall, the country is awash with weapons and powerful militias, and has rival governments and parliaments.
The UN on Monday postponed a new round of peace talks between Libya's warring factions aimed at ending months of violence and political deadlock.
Fierce clashes persist in second city Benghazi and west of Tripoli between forces loyal to the internationally recognised government and a rebel group of mainly Islamist militias.
A previous attempt to arrange UN-brokered talks between the different factions in June was unsuccessful.