It's an exclamation expressing disbelief or annoyance at something someone has said that you know is untrue.
Here are some other ways to say "What a lie!" in Spanish, depending on the context:
* ¡Mentira! (Simply "Lie!")
* ¡Qué falso! (What a lie!)
* ¡No me lo creo! (I don't believe it!)
* ¡Eso es mentira! (That's a lie!)
The choice of expression depends on the specific situation and the level of emphasis you want to convey.