The 22-year-old Lee becomes the second Welsh player to miss Sunday's clash at Murrayfield with concussion after winger George North suffered two heavy impacts to his head during last week's 21-16 home defeat by England.
WRU added that "Lee was unable to complete the final component of the return to play protocol" and will be replaced by Scott Andrews on the bench, with Jarvis making just his fourth start for Wales.
Wales team: 15-Leigh Halfpenny, 14-Alex Cuthbert, 13-Jonathan Davies, 12-Jamie Roberts, 11-Liam Williams, 10-Dan Biggar, 9-Rhys Webb; 8-Toby Faletau, 7-Sam Warburton, 6-Dan Lydiate, 5-Alun-Wyn Jones, 4-Jake Ball, 3-Aaron Jarvis, 2-Richard Hibbard, 1-Gethin Jenkins.
Replacements: 16-Scott Baldwin, 17-Paul James, 18-Scott Andrews, 19-Luke Charteris, 20-Justin Tipuric, 21-Mike Phillips, 22-Rhys Priestland, 23-Scott Williams.
(Reporting By Michael Hann, editing by Pritha Sarkar)
