Prime Minister of Australia, Tony Abbott, and Cricket ACT Chairman Ian McNamee, today officially launched the Prime Minister's XI match and named Lee as skipper, CA said in a media release.
The match will be played against England on Tuesday 14 January at Manuka Oval, and a capacity crowd is expected.
Lee played 76 Tests for Australia from 1999-2008 and 221 One Day Internationals for Australia from 2000-2012.
In a stellar international career, Lee is one of only four Australians to take more than 300 Test wickets and one of just two Australians to take more than 300 One Day International wickets.
"It's a great honour for me to be selected as captain of the Prime Minister's XI to take on England," said Lee.
"I know first-hand how this important fixture on the Australian cricketing calendar can help propel the careers of young aspiring cricketers.
"I first played in the Prime Minister's XI against India in 1999. I was fortunate enough to take four wickets in that match, and less than three weeks later found myself on the biggest stage of all playing at the MCG on Boxing Day in my first Test match for Australia.
"More than 14 years on, I'm proud to lead what I'm sure will be an emerging team of stars here next month at the magnificent Manuka Oval," Lee concluded.
The rest of the team will also be selected by Cricket Australia's National Selection Panel (NSP) with input from the Prime Minister, and will be announced in the coming weeks.
Cricket Australia Chief Executive Officer James Sutherland said he was looking forward to the Prime Minister's XI fixture, which will again be played as a day-nighter.
"The Prime Minister's XI match is a great fixture full of tradition, and we encourage cricket fans from the ACT and surrounds to come along and support it," Sutherland said.
Cricket ACT Chairman Ian McNamee is confident Canberra cricket fans will support the match.
"I urge all ACT and regional cricket fans to secure their tickets now. Last year we had about 10,000 people in attendance and this time we are confident it will be a sell-out, so cricket fans need to get in quick to avoid disappointment," McNamee said.
This will be an important game for the tourists in between the first and second matches of the Carlton Mid One Day International Series against Australia.