Scans later showed that surgery would be required and Beale went under the knife earlier today to remove floating cartilage from his joint.
The initial assessments suggest that the 23-year-old will be out of action for between three and four weeks, meaning he will play no part in the one-off international against the Scots on June 5 or the three-Test series with the Grand Slam Champions on June 9, 16 and 23.
Beale has been one of the global game's most consistent performers since his Wallaby debut in 2009 and his absence will be a huge disappointment for Australia boss Robbie Deans.
The blow is made even bigger by the fact that a fly-half crisis had led to Beale being tipped to move from full back to No10 next month.
With regular starter Quade Cooper only just having returned from ACL surgery following the Bronze Medal win over Wales at the 2011 World Cup, Deans is already without Beale's Rebels team-mate James O'Connor and Brumbies play-maker Christian Lealiifano.
Beale looked set to fill in at fly-half for the Tri Nations Champions but his injury and a lack of options elsewhere now mean Cooper is likely to be asked to return to the Test scene despite only having a few hours of action under his belt in the past seven months.