Lee invoked his "10-and-5 rights," which allow players who have played for at least 10 years and the last five with their current team to veto any proposed trade.
"When the trade was presented to me, I felt for me and my family the best thing to do was to stay here," Lee told MLB.com after the Cubs' 8-1 loss to the Astros in Houston. "That was a decision we made. (Cubs General Manager) Jim (Hendry) and I had a great conversation about it."
Lee has a full no-trade clause in his contract. He is scheduled to make just under $5 million for the remainder of the season and has indicated he wants to finish the year with the Cubs.
The slugging first baseman has 304 career homers and a lifetime .282 batting average in 13 full seasons with the Cubs and Marlins, but has struggled this season, hitting .248 with 11 home runs and 44 runs batted in.