The school made the announcement on Tuesday afternoon.
The 6-foot-9 Hunter, who averaged 9.2 points and 3.5 rebounds coming off the bench for coach Tony Bennett's Cavaliers, suffered the injury during the ACC tournament last week. He is expected to be out 10-12 weeks.
Virginia earned the top overall seed in the NCAA tournament and will open against No. 16 UMBC on Friday in Charlotte at 9:20 p.m.
Hunter won the ACC's Sixth Man of the Year Award and was considered by most NBA executives as the top pro prospect on the team, although it was unlikely he would leave after this season.