The Rockets announced the decision Friday, a day after the injury was found in an MRI exam. Team physician Walter Lowe says surgery is the usual treatment for such an injury, which has sidelined him since Nov. 10.
Yao is still consulting with doctors to determine how he will proceed. If he chooses surgery, it would take seven and 10 months for him to return to the court.
The seven-time All-Star sat out last season after surgery to repair his broken left foot. Rockets' general manager Daryl Morey says he is hopeful that Yao will recover and play for the Rockets in the future.