In the same event that won her a bronze medal in the Tokyo Olympics last month, the 34-year-old Lee was in peak condition and beat rival Zhong Tianshi 2-0 in the finals to take gold.
The two were both unbeaten at that point and it was a tight first race, but Lee's explosiveness at the end led Zhong to lose by half a wheel length.
Lee's win marks her second National Games gold in her 17-year career.
"I hope I can snatch gold again in the keirin event," a confident Lee said in an interview. The women's keirin will start qualifiers this morning.
She added: "I was already satisfied after taking third place in the qualifiers as I was in quarantine before the races and only had four training sessions before the event.
"As my opponents in the National Games are younger, my tactics came together more easily and with sufficient time between races, I could be well-prepared. I am very satisfied with my performance on the final day," she added.
Lee's gold medal takes Hong Kong's medal tally to one gold and one bronze. The bronze was won by cyclist Leung Yuk-yu in the men's omnium event on Sunday.
It was a hard-fought medal for Lee, as she had to fly to Shanghai days after the Tokyo Olympics and undergo quarantine for 21 days without formal training but China's athletes were not subject to the same restrictions.
Secretary for Home Affairs Caspar Tsui Ying-wai congratulated the cyclist: "Lee shone amongst her competitors with impressive speed and explosive power. I am deeply encouraged by her remarkable achievement."
Earlier, Lee cruised past Liu Tianzi and Fan Yonghong from Hebei, Wang Lijuan from Liaoning, Tong Mengqi from Zhejiang and Zhai Fei from Jiangsu without dropping a single race.
Lee has won two golds and two bronzes in the National Games during her career, including the gold in keirin at the 2013 Liaoning Games and the bronzes in sprint and keirin at the 2017 Tianjin Games.
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