"Few Asians have made such an impact as Mr Lee. His passing was a reminder of how big a role he played in steering and shaping modern Singapore," the award citation said.
Lee, who died in March aged 91, received a hero's funeral after an unprecedented outpouring of grief from Singaporeans who now enjoy one of Asia's highest standards of living.
He was consulted for decades by world leaders for his views on Asian affairs.
The Straits Times, founded 170 years ago, launched the award in 2012.
The inaugural winner was Myanmar President Thein Sein, who started political reforms in the former military-ruled state. In 2013, it was shared by Chinese President Xi Jinping and Japanese Prime Minister Shinzo Abe.
India's Prime Minister Narendra Modi was selected in 2014.