The reported £1million transfer was temporarily delayed over the player’s wage demands but all parties have come to an agreement with the South Korea international signing a contract until June 2018.
A statement on the Palace website read: ‘The South Korean international joined Bolton in 2009 from FC Seoul, where he made his debut at the age of 18. He went on to play 195 times for the Trotters, scoring 20 goals, and has three in 26 outings so far this season.
‘Lee has also represented his country in two World Cups, scoring twice in the 2010 competition. He was also won his 65th cap for Korea in their opening game of the Asian Cup last month, but returned home after that through injury.’
Lee, who also has several offers from abroad, suffered a minor leg fracture playing for South Korea in the Asia Cup three weeks ago but is expected to return to training later this month.
Bolton signed up the attacking midfielder in 2009 for £2million, but his contract was due to expire in the summer.
The South Korean was among the highest paid players at the Reebok Stadium and has made almost 200 appearances for the side.