The procedure will be performed by Dr. David Altchek, medical director for the New York Mets and co-chief in the Sports Medicine & Shoulder Service at Hospital for Special Surgery.
Bailey said Friday he has a torn capsule, damage to his labrum and a strain of one of the muscles that comprise the rotator cuff. He estimated a recovery period of 12 months.
"The only way to fix this is surgery -- 100 percent fix it," Bailey said. "This isn't going to heal on its own.''
Bailey becomes the second Red Sox closer and third reliever to be lost to season-ending surgery. Joel Hanrahan had Tommy John reconstructive elbow surgery in May, and left-handed setup man Andrew Miller underwent season-ending surgery for a torn ligament in his left foot last week.
Bailey said he felt pain in his shoulder while making a pitch July 12 in Oakland, Calif., but he suspected his condition was "building" since he was diagnosed with biceps tendinitis earlier in the season.
Bailey was a two-time All-Star closer for Oakland when the Red Sox traded for him after the 2011 season, acquiring him and outfielder Ryan Sweeney from the Athletics for outfielder Josh Reddick and two minor leaguers. But Bailey has not been fully healthy since 2009, when he was the American League Rookie of the Year, and his injury woes only worsened in Boston.
Last season, Bailey was limited to 19 games after tearing the UCL ligament in his right thumb in a freak spring training injury. He posted a 7.04 ERA and six saves.
This season, he was sidelined with biceps tendinitis at the end of April that caused him to miss 21 games, and he never fully recovered his velocity thereafter, losing the closer's job he'd inherited when Hanrahan was injured by giving up five home runs in a span of five appearances.
While in Oakland, Bailey missed 52 games in 2011 with a forearm strain, and in 2010, he twice ended up on the DL, once for an intracostal strain, and the second time for surgery to remove loose bodies from his elbow.