
The 31-year-old, who moved to Hillsborough in the summer of 2012, has agreed a new one-year deal. His previous contract expired on June 30.
Lee, a key figure in the Owls team that achieved back-to-back Championship play-off finishes under Carlos Carvalhal, has made 186 appearances for Wednesday, scoring 22 goals.
But his Wednesday career has been blighted over the last 18 months by injury problems. He has only played 17 times in the last two seasons.
However, the former Manchester United youngster made a welcome return to action in the penultimate fixture of last term, coming on as a late substitute in the draw at Preston North End. The 31-year-old followed that up by starting and playing over an hour of the Owls' final-day defeat to Queens Park Rangers.
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Lee has enjoyed a productive pre-season with the squad, travelling to both Portugal and Germany training camps and featuring in a number of their pre-season friendlies. Now he will be scrapping it out with Barry Bannan, Sam Hutchinson and Joey Pelupessy for a starting berth in the 2019/20 season.