The Lambda sector is a sector of space.
History and specifics[]
In 1990, a Vulcan trade fleet was passing by the Lambda Sector, with their ships visible by the primitive Hubble telescope over Earth. However, Gary Seven, who sought to preserve the timeline, sabotaged the telescope. (TOS - The Eugenics Wars novel: The Rise and Fall of Khan Noonien Singh, Volume 2)
A Starfleet Academy training simulation has cadets patrolling the Lambda colony in this sector. (ST video game: Starfleet Academy Starship Bridge Simulator)