“It’s probably one of the best pieces of news that I have ever had,” said 46-times capped Byrne.
We have been given the best of everything this season, including the squad, coaches and the new training facility.
"Throughout my rugby career I have had both highs and lows, and this for me is right up there in the highs.
"Becoming captain of the Dragons will be a massive challenge for me, but now it's time for us to make sure that we deliver as a team.
"We have been given the best of everything this season, including the squad, coaches and the new training facility.
"I want to lead by example and I hope that the youngsters can learn from my attitude and the experience that I have gained through my international career and through playing in France."
Dragons Director of Rugby Lyn Jones said he picked Byrne, who was part of Wales' 2008 Grand Slam team, for his experience and leadership qualities.
"Lee's ability as a player is outstanding; he has great leadership skills and has a lot of experience behind him," said Jones.
"Andrew Coombs captained the side very well last season, but I feel that this is a season that I need apply change throughout which will also allow Andrew to focus on his international career."