Neto picked up the injury in the first half of last Friday’s 1-0 win at Fulham.
The 21-year-old Portuguese international has been one of the brightest sparks in an otherwise troubled season for Nuno Esperito Santo’s men.
Neto has scored five goals in and provided six assists in 35 appearances across all competitions for Wolverhampton Wanderers this season.
A club statement read: "Pedro Neto suffered a significant injury to his patella (knee cap) during the match against Fulham and, following a review with a knee specialist in London at the weekend, surgery has been planned for later this week.
"Unfortunately, he is not expected to return to play until next season."
The news will put Neto’s participation for Portugal in this summer’s European Championships in doubt. He has won three caps for his country so far and scored once.
Neto joined Wolves from Braga in the summer of 2019.
Wolves have also confirmed that Neto’s compatriot, Ruben Neves, has tested positive for coronavirus and will miss this weekend’s Premier League game against Sheffield United at Molineux.
On Neves, the statement added: "Ruben Neves has tested positive for Covid-19 and is self-isolating in line with government guidance."
