Neto picked up the injury in the first half of Wolverhampton Wanderers' 2-0 defeat to West Ham United in the Premier League last weekend.
A diagnosis of the injury has revealed that Neto will need surgery, effectively ruling him out of Portugal's plans for the Mundiale.
Neto has three caps for Portugal and was called up for their recent Nations League games against Czech Republic and Spain, although he did not get playing time.
He also missed last year's European Championships because of a serious knee injury.
'Pedro sustained an ankle injury against West Ham on Saturday where he strained the lateral ligaments,' read a club statement.
'Following further evaluation and a specialist opinion this week, it is planned for him to undergo surgery. This means that, unfortunately, he will not be fit for the upcoming World Cup.'
The 22-year-old winger has made nine appearances for Wolves this season, without any goal involvements.
The news presents another unwelcome headache for Wolves, who currently are unable to call upon the services of strikers Raul Jimenez, Hwang Hee-Chan and Sasa Kalajdzic due to injury.
Wolves, who are still without a manager after sacking Bruno Lage this week, travel to Chelsea in the Premier League this weekend.
