Converting old router into access point

I am trying to convert my old router into an AP but I am running into some problems.

Here is what I have done so far:

1. Set AP to static IP (192.168.0.250)
2. Disabled DHCP
3. Connected lan port from the main router (192.168.0.1) to a lan port on the AP
4. Restarted AP

When connected to the main router I can see and access (and configure) AP.

The problem is I can’t wifi connect to the AP as I get "couldn’t get IP address". This problem doesn’t exist if I turn on DHCP on the AP. How do I tell the AP to use the main router for DHCP?

AP is D-link DIR-850l

Edit 1#
I did a few factory resets and redone the setup from the start, disabling UPnP, playing around with different LAN IPs… the result is the same. I have the latest firmware for the AP router and there is no option to add LAN default gateway. DD-WRT is not available for this router. I even created a WAN subnet to verify that the AP router is working and in this mode I can connect normally via wifi and browse the internet.
For reference here is AP router manual http://files.dlink.com.au/Products/DIR-850L/Manuals/DIR-850L_A1_Manual_v1.00(DI).pdf