Paterson revealed Carter's left leg will be immobilised for at least six weeks and he will be confined to bed rest.
The period of convalescence takes in the rest of the Tri-Nations and the bulk of Canterbury's NPC and Ranfurly Shield defences and makes him a doubt for the All Blacks' end-of-season European tour.
Versatile Blues and North Harbour back Luke McAlister, who stood in at first five-eighth in the third British & Irish Lions Test last month, is in pole position to reclaim the number 10 shirt.
Carter's fellow Crusaders Aaron Mauger and Leon MacDonald are other possibilities.
The All Blacks selectors have not yet discussed whether a replacement player will be called into the squad.
Options include Wellington's Jimmy Gopperth and Nick Evans of Otago.
The team reassembles in Dunedin on Sunday to prepare for the August 27 visit by table-topping South Africa.