The 71-year-old pope said the lesion was found at an early stage and was "circumscribed" or well-localised.
The Vatican later said Leo would undergo surgery in the first days of the week, with an expected recovery time of a week.
The American pontiff made the announcement during his Sunday noon blessing. He thanked the crowd for their closeness and entrusted himself to their prayers.
Leo has no previously known health problems and is considered physically active, with weekly tennis games and swimming at the papal summer retreat in Castel Gandolfo.
The pope has a major trip planned from November 6 visiting Uruguay, Argentina and Peru.
It's unclear whether the planned surgery and recovery would affect the itinerary, but Leo said earlier in his remarks on Sunday that he planned to go.
In his remarks, delivered in Italian, Leo said during a recent medical check, "doctors found a small, localised nodule in my lung".
"It was detected at a very early stage and is circumscribed. The doctors believe it's best to take action, so, following their advice, I've decided to have surgery to remove it," he told those gathered in St Peter's Square.
"The surgery is already scheduled for the coming days. Thank you for your spiritual support, and I entrust myself to your prayers."
Leo's predecessor, Pope Francis, died April 21, 2025, of a stroke following a long hospitalisation brought on by a respiratory crisis that developed into double pneumonia. Francis suffered from chronic lung disease and had part of one lung removed as a young man.
Leo is expected to undergo surgery at Rome's Gemelli Hospital, where Francis and popes before him were treated and where there is a special apartment for pontiffs.
Italian Premier Giorgia Meloni expressed her support, and that of the Italian government, to Leo "as he faces this challenge in the coming days".
She said the serenity and calm with which he spoke about it were reassuring.
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