Allowing people to interact with machines in the same way they do with solid objects could make computing much more intuitive, he told the BBC.
He can see the system coming into general use within a decade.
The system consists of a transparent LED display with built-in cameras, which track the user's gestures and eye movements.
The design was inspired by what he sees as a human need to interact with things.
"Spatial memory, where the body intuitively remembers where things are, is a very human skill," he said.
Translating this to the digital world will enable people to use computers more easily as well as complete more complex tasks.
"If you are working on a document you can pick it up and flip through it like a book," he told the BBC.
For more precise tasks, where hand gestures are not accurate, there is a touchpad. It will allow, for example architects to manipulate 3Dmodels.
"The gap between what the designer thinks and what the computer can do is huge. If you can put your hands inside the computer and handle digital content you can express ideas more completely," he said.
Not everyone is convinced by the Minority Report-style future that will see us interact with machine via touch.
In an interview with The Awl website designer Christian Brown said: "Human hands and fingers are good at feeling texture and detail, and good at gripping things - neither of which touch interfaces take advantage of.
"The real future of interfaces will take advantage of our natural abilities to tell the difference between textures, to use our hands to do things without looking at them."
Mr Lee, a graduate from the Massachusetts Institute of Technology, is currently serving his military obligation in South Korea at Samsung Electronics, where he is working on TV interfaces.
At TED, which stands for Technology, Education and Design, he also demonstrated other projects he is working on, including ZeroN, a floating ball, which can literally be placed in midair.
It utilises electromagnetism to stay afloat and when coupled with software can be used for a variety of applications.
"It could be used in schools," said Mr Lee.
"If kids are learning about planetary movement they can pick up a model of a planet and place it in orbit. That is tangible and makes the learning experience so much more powerful."
He is also working on an augmented reality shopping app, which combined with a virtual reality handset would allow users to try on items such as watches from online shops.
For Mr Lee the ultimate goal is to unite the digital and physical worlds.
"I don't want to look back on my life and find that I have just been typing on a keyboard," he said.
"It is one of our key human skills to be able to interact with 3D spaces and I wanted to let people do the same with digital content."
Computers are becoming more user-friendly as the gap between the real world and technology closes.
"With the first computers there was a huge gap but that gap is getting smaller with things such as touchscreens," he said.
"The only boundary left is our imagination."
Source: bbc.co.uk
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