"He has been trapped in a hollow pillar very deep down... with multiple injuries and not enough oxygen for a very long time," Doan Tan Buu, deputy chief of Dong Thap province, told journalists at the construction site.
"We had prioritized the rescue of the boy. However, the conditions mean it is impossible the boy has survived," he added, saying that the decision had been taken after consultation with medical experts.
Thai Ly Hao Nam became trapped in the 35-meter (115-foot) hole late on Saturday. Rescue workers remain flummoxed as to how the boy fit as the passage is only 25 centimeters (10 inches) wide and partially blocked by a concrete pillar.
The 10-year-old was reportedly looking for scrap metal with friends at the site near the Mekong Delta, where a bridge is being built.
Rescue workers had been pumping oxygen into the shaft, emergency workers said, but it was impossible to provide him with enough due to the groundwater and the boy had not communicated with them in over three days.
Attempts to dig near the hole and loosen the soil had also complicated rescue efforts, as it caused the pillar to tilt sideways and block some of their equipment from reaching Nam.
Rescuers are determined to bring his body up as soon as possible for burial, but Doan Tan Buu admitted it was a "very difficult task".
