Chief Minister Lim Guan Eng said Yang di-Pertua Negri Tun Abdul Rahman Abbas would confer the Darjah Setia Pangkuan Negeri (DSPN), which carries the title Datuk, on Lee on Aug 30.
"The state will award the DSPN to Penang's first Olympic silver medallist, Bukit Mertajam home-grown talent Lee Chong Wei," Lim told a press conference Wednesday.
He said Chong Wei had done not only Penang but also Malaysia proud with his achievement.
"Even though Malaysians were disappointed that he failed to win the gold medal, we are proud at his singular achievement which has brought joy to both state and country.
"The state government hopes that this recognition will spur him on to break more records and achieve greater success to win greater glory for both Penang and Malaysia," said Lim.
He said the DSPN was instituted in 1976 and limited to 800 living persons, and is conferred on individuals of high position who have contributed unique and valuable services to the state.
Chong Wei was not at the morning press conference as he is only scheduled to arrive from Kuala Lumpur in the evening while Lim has to fly off to Kuala Lumpur for his live debate later Wednesday night.
Also at the press conference were state Youth and Sports, Women, Family and Community Development Committee chairman Lydia Ong Kok Fooi and Chong Wei's eldest brother Chong Hoon, who contacted the badminton player on his mobile phone and placed it on loudspeaker mode.
Chong Wei said he was very happy and did not at all expect to get a Datukship for being a silver medallist.
"I thought that maybe, if I win the gold medal, I might be given Datukship. But no, I never expected it for the silver and was very surprised," he said.
Chong Wei said he thought Chong Hoon was joking when he called him on Tuesday evening with the news.
"My thanks to the Penang state for fully supporting me," he added.
Chong Hoon, 33, said he was proud of his brother and happy for him.