Lee, who celebrated his 38th birthday on Friday, was informed of his suspension by the sport's governing body, the WPBSA, following reports of irregular betting patterns during Lee's 4-2 defeat to John Higgins in a Premier League match on Thursday night.
Only last week, Lee was informed he would not face criminal charges over match-fixing allegations dating back to 2010, although the WPBSA said they would still launch their own investigation into that incident.
Lee's manager Adam Quigley said: "Stephen can't believe it is happening again, just one week after a case that has been outstanding against him for two-and-half years was dropped by the Crown Prosecution Service (CPS).
"Stephen is absolutely devastated. He has worked incredibly hard this year to get back up to number seven in the world. He is sick of all this stuff getting thrown at him and feels there are doubts about him every time he misses a ball.
"Stephen was supposed to be going out for a meal with his wife to celebrate his 38th birthday. He has booked his flights to a tournament in Antwerp next week. Now they are both cancelled and he is engaging a lawyer to fight his corner."
WPBSA chairman Jason Ferguson said the governing body had decided to suspend Lee pending the outcome of their inquiries into both the incident in 2010 and the events in Thursday night's match against Higgins.
Lee looked likely to tie the match at 3-3 but missed a pink and black combination, allowing Higgins to win 4-2. Lee's performance was immediately questioned in a series of tweets by his West Country rival Judd Trump, which were subsequently deleted.
The WPBSA's full statement read: "On 2 October 2012 the Crown Prosecution Service announced that there will be no criminal proceedings in the match fixing allegations against Stephen Lee made in 2010. Following this decision by the CPS, the WPBSA started its own investigation into these allegations.
"On 5 October 2012 the WPBSA met with the Gambling Commission in order to review material collected by the Gambling Commission which may prove relevant to the WPBSA investigation.
"The WPBSA is now in the process of conducting a thorough enquiry into the circumstances and this will be led by Nigel Mawer, the Chairman of the WPBSA Disciplinary Committee.
"On 12 October 2012, the WPBSA was informed of suspicious betting patterns relating to a game between Stephen Lee and John Higgins played on 11 October 2012. This suspicious activity has also been referred to Nigel Mawer, the Chairman of the WPBSA Disciplinary Committee.
"The WPBSA have carefully considered both the initial information from the Gambling Commission which was reviewed on 5th October 2012 and the new information regarding suspicious betting patterns in relation to the match between Stephen Lee and John Higgins from 11 October 2012.
"The WPBSA have concluded that it would not be appropriate for Stephen Lee to continue to compete on the World Snooker Tour whilst these investigations are undertaken and therefore WPBSA Chairman Jason Ferguson has taken the decision to suspend Stephen from competition whilst this enquiry is ongoing.
"Subject to his right to appeal, this suspension will remain in place until either the conclusion of the investigation or any resultant hearings."