The 29-year old Malaysian hobbled off court in tears after suffering an awkward twist just five minutes in to a Thomas Cup match against Denmark's Peter Gade on Tuesday.
Lee, the 2008 Beijing Olympics silver medallist, was later taken to a hospital, accompanied by coach Tey Seu Bock, where an MRI confirmed a tendon tear.
"The doctor said that it would take three to four weeks for the injury to heal," Seu Bock said, adding that the shuttler will be sent back home on Wednesday.
"We will conduct another MRI back home and get a second opinion on the seriousness of his injury."
The coach said Lee was devastated with the timing of the injury with barely two months left for the London Games, starting July 27, which will be the Malaysian's last Olympics.
"He felt bad that he could not contribute a point for the team. He was also worried about the Olympic Games and wondered why it had happened so close to the Games. He is emotionally down," he said.
"All he needs right now is some good rest and time to recover from this setback. We still have time before the Olympic Games and we can help him to regain his confidence."
Lee will receive treatment at the National Sports Institute upon his return to Kuala Lumpur.
"My leg is very painful. I thought I could carry on playing but the doctor told me I have suffered a serious injury. I am sad that I cannot help my team," he was quoted as saying by the Bernama news agency.
The shuttler was not yet ready to speculate on his chances of playing in the Olympics.
"I'm not sure. I have to let Dr Ramlan (Abdul Aziz, ISN director) look at it first.
"Mentally, I have to be stronger for the Olympics."