Butler's surgery date for his right knee will be determined at a later time.
"Obviously a gut punch on every level for Jimmy and the entire group, but I firmly believe that this is a part of the journey," said Butler's agent Bernie Lee in a statement. "We can't only expect to take the good things out of it. I've known for over 10 years now that Jimmy is going to win a championship before he is done. My belief in that is unwavering."
Butler's right knee problems continue to pile up after he tore his meniscus in the same knee during the 2018-2019 season and sprained his MCL during last season.
The 36-year-old veteran averaged 20.0 points, 5.6 rebounds, and 4.9 assists through 38 games this season.
Golden State currently sit at the No. 8 seed in the Western Conference with a 25-19 record. They need to at least be a No. 6 seed to make the play-in round ahead of the NBA Playoffs.