The 35-year-old damaged his ligaments after being tackled by Manu Tuilagi in the 20-9 defeat to England at the Aviva Stadium on Saturday.
Wallace, who was stretchered off, had an operation to repair the damage in Dublin on Sunday - with the experienced flanker now facing a lengthy period of rehab.
Wallace, whose World Cup hopes were ended by the injury, will join fellow crocked international and Munster team-mate Felix Jones on the sidelines.
Jones had looked to be a certainty for the World Cup squad before he was injured in the warm-up games against France.
The 24-year-old will see a specialist for a clearer indication of how long he faces out.
Gilbert has released a new line of rugby cleats. The Gilbert Virtuo 8S is part of the exciting new product. Check it out.
The Barbarians are one of the top invitational rugby sides with a long history and classic rugby jersey.
The Nike Tiempo is a solid rugby cleat and one of few styles still made from full-grain natural leather.
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Wear the crest of the British and Irish Lions on your t-shirt. A great look for the summer.
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The Lions are ready to get their Australia tour underway. They arrive in Perth on Monday.
The New Zealand All Blacks training jersey for 2013/14. Get in the Gear!
The USA Rugby Pro Alternate rugby jersey is perfect for any fan of the Eagles. Get yours to wear during the summer Test matches.
The NEW All Blacks 2013/14 jersey has arrived at World Rugby Shop. Dare to wear the colors of the All Blacks.
