Ms. Lee used a sharp pair of scissors to cut her ex’s genitals off at her home in Hukou, Taiwan, after inviting him over to have sex.
It is believed the 58-year-old discovered Mr Chen had slept with someone else while they were still married.
According to the police, Ms Lee left Mr Chen with just 1cm of his penis left after hacking the rest off, throwing acid on it and then flushing it down the toilet.
She is reported to have said: “If I can’t have it, no one else can.”
After the attack, she is believed to have taken an overdose of sleeping tablets.
Authorities said they received a call from a howling Mr Chen following the incident at 8.50pm on Wednesday.
He feared more violence from his ex-wife and had locked himself in the toilet, officers revealed.
According to reports, the couple had divorced less than a month ago, but Mr Chen – jobless for two years – continued to live off his wife.
Ms Lee is said to have devised a plan to remove her ex-partner’s manhood after learning that, on top of relying on her earnings, he had also been seeing another woman behind her back when they were married.
She reportedly “seduced” him with the promise of sex and then grabbed his penis before shearing it off with scissors, followed by both testicles.
Xinhu Precinct deputy chief Kao Kai-long said: “While the victim had his pants down, the suspect used a pair of scissors to cut off the victim’s genitals.”
The authorities say they have not been able to retrieve the body parts.
Arriving officers added Ms Lee was found unconscious in the home.
Both she and her ex-husband were taken to National Taiwan University Hospital Zhudong Branch and are in stable condition.
The hospital’s head of urology Chang Chen-yeh said they would not have been able to reattach Mr Chen’s penis even if the police had found it.
His genitals would have been contaminated with bacteria, and in any case the chances of him ever regaining sexual function were “extremely low”.
The police said they were still waiting for the pair to give formal written statements before they formally charge and detain the wife.
Both are currently being treated in hospital.