Cut cold butter into flour. Mix well and add pecans. Pat into the bottom of a 9×13 baking pan and bake for 20 minutes or until golden brown. Let cool completely.
Whip together softened cream cheese and powdered sugar. Fold in 8oz of cool whip. Spread over fully cooled shortbread layer.
Combine lemon pudding and milk. Beat until thick. Spread over cream cheese layer.
Spoon and swirl the remaining cool whip on top. Sprinkle with pecans.