Milito had been out of action for a month and lasted only seven minutes of his return against CFR Cluj in the Europa League, going down in agony after planting his studs in the turf and twisting his knee.
Milito, who has scored nine goals in 20 league appearances this campaign, was carried off on a stretcher and coach Andrea Stramaccioni admitted his loss is a massive blow to the club, who went on to win their first-leg clash 2-0.
"It's his cruciate ligament, a new type of injury for Diego, nothing to do with the problems he's had before," Stramaccioni said.
"Unfortunately that takes some of the shine off the win, which was otherwise very positive.
"We're gutted for Diego as a person first and foremost, and then of course for what he represents as a player. We need to see when he'll have the operation.
"He is a huge loss for us because he's our only out-and-out centre forward.
"We'd planned for him and (Rodrigo) Palacio to play part of the game each tonight to keep them both fresh, but when you get injured seven minutes into the match it's just sheer bad luck.
"We're all saddened, all of us, and I feel particularly close to the lad personally. We're all very down about it."