Lust, Caution to pass China's censorship rules and make it child friendly, state media reported on Tuesday.
Lee, who on Saturday picked up his second Venice Film Festival Golden Lion for best picture for his new film, was told by Chinese authorities he had to cut out steamy scenes for mainland China's audience, Xinhua news agency said.
"Authorities told me that there was no film rating system on the mainland so they let me cut it," Xinhua quoted Lee as saying.
After snipping about 30 minutes of the film that had an original running time of two hours and 36 minutes, it became "relatively clean", Lee was quoted as saying.
"Children are able to watch it on the mainland."
The movie, a tense drama set in Japanese-occupied Shanghai in the 1940s, has been given the NC-17 rating in the United States, banning viewers under 17 from watching it.
But China has no film rating system, with its censor, the State Administration of Radio, Film and Television, arguing that "films not suitable for children are not suitable for adults," Xinhua said.
Lee said he "took pains" to cut the work himself but the integrity of the film was preserved.
Sex scenes
"The spirit of the film remains despite the cutting," he said.
"For a viewer who has not watched the full version, the short version remains reasonable."
While sex scenes were of most concern, some violent scenes had also been cut, Xinhua said.
The film is set to open in China on October 26, according to Xinhua, a month later than its schedule opening date in late September around the world.
However, Xinhua highlighted comments posted on internet chat rooms suggesting that the editing will drive audiences away from the cinema and encourage them to buy the full version on pirated DVDs instead.