Lactose / inducer binds with repressor protein, inactivates it, frees operator gene, RNA Polymerase freely move over structural genes / RNA polymerase access to the promoter, transcribing to, lac mRNA, which on translation, produce transacetylase, permease, β-galactosidase.
The following diagram to be considered in lieu of above explanation.
Detailed answer:
In lac operon, lactose acts as an inducer. The lactose is transported into the E. coli cells by the action of permease.
In the presence of lactose (inducer) : Lactose (inducer) binds with repressor protein and inactivates it. So repressor protein cannot bind to operator gene. The operator gene turn on becomes free and induces the RNA polymerase to bind with promoter gene. Hence, three structural genes such a way that about 6% of it becomes express their product and respective enzymes are produced. These enzymes act on lactose so that lactose is metabolized into glucose and galactose.