The lich can't be killed by normal (as in hack n' slash) means, he'll only regenerate. Hint- iirc there's a mention somewhere in the tomb area where you first encounter him on how he can be permanently done in.
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You need to find his phylactery, and bring it into a particular tomb in the last part of Dorn's Deep just before you exit to Wyrm's Tooth (the one with the locked door).
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