UK Home Secretary Theresa May had signed the official orders for his extradition to India to answer the Central Bureau of Investigation's case on May 22, giving him 14 days to appeal against the order.
"An appeal has been filed and it will go back to the legal process," a Home Office spokesperson said.
The case will now proceed to a case management conference (CMC) hearing, to be scheduled over the next few days.
49-year-old Shankaran, a close relative of former Navy Chief Admiral Arun Prakash, has been embroiled in a legal challenge against the CBI's extradition request to the UK government dating back to 2007.
Meanwhile, the retired naval commander has been remanded on conditional bail, which includes the requirement to live at a single UK address he provided to the court, a deposit of 20,000 pounds and no right to foreign travel.
He is a key accused in the case of leaking classified information from the War Room to arms dealers and has been absconding since the case was registered by the CBI in March 2006.
Shankaran was first located in UK in 2007 and an extradition request was sent.
Shankaran was arrested by UK authorities in April 2010 on the basis of the non-bailable arrest warrants issued by the Court of Chief Metropolitan Magistrate in New Delhi.
The UK's Crown Prosecution Service (CPS) had argued the CBI's case that there was substantial evidence to extradite the accused for a trial in India.
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