It is a devastating blow for the 22-year-old, who was playing in his first game back since his three-match suspension for dangerous play.
Coach Phil Mooney said: "We initially thought it was a dislocation but later x-rays showed it was fractured in two places."
Scrum-half Will Genia will take Iaone's position, after he flew to South Africa as a precaution when captain Sam Cordingley went down with a calf injury.
Mooney added: "With only one match remaining (against the Cheetahs), we will not seek a replacement. Instead we shall keep Will with us as an additional half-back."
The Reds medical staff stated that Ioane's injury would normally mean up to six weeks out of football but they will await a specialist's report before making a more definite call.
Queensland take on the Cheetahs this week, before returning home for a much-needed week off. They then tackle the Western Force on April 18.