Apple Daily said in an article on its website on Monday that if its board decides on Friday to cease operations of the newspaper, its website could stop publishing as soon as early Saturday morning, and Saturday's print edition of the newspaper would be its last.
Authorities have said dozens of Apple Daily pieces may have violated the security law, which Beijing imposed on the city previous year, the first instance of authorities taking aim at media reports under the legislation.
The police operation against Apple Daily has drawn criticism from the US and Britain, which say Hong Kong and Chinese authorities are targeting the city's promised freedoms.
Five executives, including chief editor Ryan Law and CEO Cheung Kim-hung, were arrested under the charge of colluding with foreign forces.
Tong Ying-kit is facing life in prison for two charges under Beijing's national security law.
Those three are still under investigation but were released from police detention.
Chinese and Hong Kong officials have said the media must abide by the law, and that press freedom can not be used as a "shield" for illegal activities.
A man accused of driving a motorcycle into police officers while carrying a Hong Kong protest flag has become the first person to stand trial under the national security law implemented previous year as China's central government tightened control over the city.
Apple Daily has come under increasing pressure since Lai was arrested a year ago under the security legislation, which was introduced after months of at times violent pro-democracy protests.
Carrie Lam said at a news conference on Tuesday that the actions do not target press freedom.
An adviser for Jimmy Lai, the Hong Kong billionaire and founder of Next Digital, called the raid a "blatant attack".
China responded to the protests with a number of measures suppressing dissent, including the national security law, which criminalises subversion, secession, terrorism and foreign collusion endangering national security.
The newspaper has come under increasing pressure since owner and Beijing critic Lai, who is now in jail, was arrested under the national security law last August and has since had some of his assets frozen.