Officials said in a statement Friday morning that Britain will formally contest the working group's opinion issued earlier in Geneva.
The statement says Britain is "deeply frustrated" by the Assange situation.
"The opinion of the UN working group ignores the facts and the well-recognized protections of the British legal system," the statement says. "He is, in fact, voluntarily avoiding lawful arrest by choosing to remain in the Ecuadorean embassy."
The statement points out that an allegation of rape is still outstanding and that a European Arrest Warrant is in place.
It says Britain has a legal obligation to extradite Assange to Sweden for questioning.
Meanwhile, the Swedish Prosecution Authority says the call from the UN working group for Julian Assange to be released and compensated "has no formal impact on the ongoing investigation, according to Swedish law."
Spokeswoman Karin Rosander said the prosecutor responsible for the case is traveling and has not yet been able to comment on the case.
Assange has been holed up in the Ecuadorean Embassy since 2012 to avoid arrest and extradition to Sweden, from where he fears he would be sent to the United States.
Earlier, A UN human rights panel said WikiLeaks founder Julian Assange has been "arbitrarily detained" by Britain and Sweden since December 2010.
The UN Working Group on Arbitrary Detention said his detention should end and he should be entitled to compensation.
Swedish prosecutors want to question Assange over allegations of rape stemming from a working visit he made to the country in 2010 when WikiLeaks was attracting international attention for its secret-spilling ways.
Assange has consistently denied the allegations but declined to return to Sweden to meet with prosecutors and eventually sought refuge in the Ecuadorean embassy in London, where he has lived since June 2012.