The setback was initially only expected to rule him out of the next two Super Rugby matches but scans revealed that he needed an operation to clean up articular cartilage.
Ioane underwent surgery earlier today and now faces a race against time to be fit for the opening international against The Lions on June 22.
The official Qantas Wallabies twitter feed stated this morning that Ioane was 'touch and go' for the Brisbane Test in a months' time.
Ioane's absence would be a major blow for head coach Robbie Deans and co as the 27-year-old is a near certain starter on the left wing.
He was named in Deans' 25-man squad last Sunday and will be one of his team's most potent attacking weapons if he returns to fitness in time to face Britain and Ireland's elite.
Joe Tomane of the Brumbies and Nick Cummins from the Force were the other wingers included in Deans' initial party but six more players will added to the squad on June 11.
The news comes on the back of more positive news surrounding fellow Lions hopefuls Pat McCabe and George Smith.
Inside centre McCabe and flanker Smith were both left out on Sunday after picking up injuries in the latest round of Super Rugby but could now be fit enough to be added to the squad in just under three weeks.