An MRI exam performed Tuesday confirmed the ligament tears, and Smith will undergo surgery in the coming weeks. He suffered the injury in the fourth quarter of Saturday's win against Western Illinois after being hit near the sideline.
Smith was a first-team All-Big Ten selection in 2009 and led the Big Ten in both receiving yards (1,100) and receptions (91) last fall.
"He was one of our best players, one of the best players in the country at his position, so it's a tough setback when you lose that quality of a player," Purdue coach Danny Hope said Tuesday. "You lose his presence on the field, but he can still help us a bunch from a leadership standpoint.
"It's a big loss, and the team's very upset about it."
Purdue feared Smith's injury was serious, but the official word only came Tuesday. Hope said Smith now will weigh his options, which include pursuing an NFL career or applying for a sixth year of eligibility. Smith redshirted in 2007.
"It's the one place on our football team going into this season that we have some pretty good depth," Hope said.
Adam Rittenberg covers Big Ten football for ESPN.com. He can be reached at firstname.lastname@example.org.