Pending approval by the legislature, Lee would be the eighth woman to serve in one of 15 Cabinet-level positions.
"Our commonwealth's diversity is our strength, which is why I made a commitment to building a Cabinet that reflects it," Northam said in a statement.
"I'm honored to have this formidable group of experienced, accomplished female leaders joining me in working to build a Virginia that works for everyone, no matter who you are, no matter where you live."
In November, Northam defeated Republican Ed Gillespie, who also vowed that his Cabinet would reflect Virginia's diversity. The Democrat, who is a pediatric neurologist, carried female voters by 22 points.
Departing Gov. Terry McAuliffe (D) has six women serving in his Cabinet. In 1986, then Democratic Gov. Gerald Baliles entered office with a cabinet of three men and three women.
Virginia also elected a record number of women to the state legislature in November: Twenty-eight will be seated Wednesday, up from 17 currently serving. Still, only one woman has ever been elected to statewide office in Virginia: former attorney general Mary Sue Terry (D).
Ensuring female representation at high levels of government has long been a goal for advocates.
In a 2008 report, the Center for Women in Government and Civil Society at the University of Albany found that women made up 42 percent of the top advisers in governors' offices in 2007.
Canadian Prime Minister Justin Trudeau assembled a cabinet that was half female when he took office three years ago. Asked about the importance of gender, he simply said, "because it's 2015."
In the 2016 presidential race, Democrat Hillary Clinton vowed that her Cabinet would be half female.