Recovery time for the surgery is approximately eight weeks, according to the Knicks, so Wallace likely will miss the rest of the regular season and at least the first week of the playoffs.
The Knicks say the injury -- a fracture of the fifth metatarsal -- was revealed via new X-rays and was a "progression" from the stress reaction in his left foot.
Wallace had been sidelined since Dec. 13 with the stress reaction. The Knicks held out hope that Wallace eventually would be able to return to the lineup, claiming that he had taken part in some aspects of practice in recent days.
But in an indication that the Knicks were not confident in Wallace's full recovery, they signed free-agent big man Kenyon Martin to a 10-day contract Saturday.
Wallace played well for the Knicks prior to his injury, averaging 7.2 points and 4.2 rebounds in 14.6 minutes over 20 games. The 38-year-old ended a two-year retirement and joined the Knicks in training camp, signing a one-year contract for the veteran's minimum.
It is unclear at this point if the Knicks will release Wallace to make room on the roster for another player.