The 24-year-old has been training with the club for the past few weeks after featuring in Hatters’ pre-season friendlies, as boss John Still revealed he would be offered a deal after Tuesday night’s 1-0 home defeat to Bristol Rovers.
Lee, who has also had spells with Dagenham, Gillingham and Plymouth, playing against Luton last season, has penned a short term deal with the option to extend based on certain performance triggers.
It’s the second time Lee, who is the brother of West Ham striker and ex-Luton loanee Elliot, has linked up with Still and on the move, he told the club website: “I’m really pleased to sign and get it all done, I’m looking forward to getting started now.
“I’ve been training with the lads for a couple of weeks now, so it’s great to get it all tied up.
“I like to get on the ball and get the team passing and hopefully I can score a few and create a few goals too.”
Meanwhile, Still added: “Olly’s been with us for a few weeks, he’s a good footballer.
“He did well at West Ham and Birmingham – we know his brother Elliot obviously and the family – he’s got a good pedigree.
“We were looking for a good passer of the ball, and he’s that. He’s a good lad too, a bright lad and he knows where the goal is – so hopefully he’ll do well for Luton.”