Hi,
The lambda light illuminating means that there are fault codes to be read, which might not necessarily be a fault with the oxygen/lambda sensor.
Here’s the guide on how to read the codes:
https://www.volvoclub.org.uk/faq/EngineOBDCodes.html
And here’s pretty good video showing how to read them:
https://youtu.be/odE9LoTQqwg
See which fault codes you have as a first step, then go from there.
Cheers