1. A reference to the writing, study, or content of literature, especially of the kind valued for its quality of form: Literary words and expressions are often unusual in some way and are used to create a special effect in a piece of writing such as a poem, speech, or novel.
2. Associated with written works or other formal writings that have a significant style intended to create a particular impression: Jack used literary effects when he wanted to highlight his short story with special artistic features and attributes.

Something doesn't have to be "literature" to be literary, however, they are related.