The creator Harriet Braun and also the actresses like Ruta Gedmintas confirmed the news by the means of Twitter:
Sadly BBC Three have confirmed there won’t be a 3rd series of Lip Service. A huge, huge thank you to all the fans for all your support xx - Harriet Braun @HarrietBraun
No more LIp service.Thankyou to all who made it special to work on.let's hope there are more shows with equal representation in the making.x - Ruta Gedmintas @Mighty_Minto
During the diffusion, we had been able to feel a kind of end with the death of Cat and Frankie who left the city, but we could however also see that like a new departure with stories centered on new characters like Sadie (Natasha O'Keeffe) or Lexi (Anna Skellern).
It is always a pity when a lesbian series stops because we know it won't be replaced by another one or at least not in the immediate future.