Rice was injured in Monday's 14-9 win over the St. Louis Rams.
Rice was not having much of an impact in Seattle's pass game this season, but quarterback Russell Wilson was under immense pressure from blitzing defenses recently as the Seahawks' makeshift offensive line failed to provide adequate protection.
Rice was targeted 35 times by Wilson but finishes the season with just 15 receptions for 231 yards and three touchdowns. He went without a catch against the Rams and was targeted three times before getting injured in the first half.
Throughout his three seasons with Seattle, Rice was slowed by injuries. His season in 2011 was cut short by a serious concussion and shoulder problems that saw him limited to nine games. He played in all 16 games in 2012 and had 50 catches for 748 yards and seven touchdowns. It was his most productive season since 2009, when Rice went to the Pro Bowl after eight touchdowns and 1,312 yards receiving.
The loss of Rice leaves Seattle without a tall receiver and makes the return of Percy Harvin even more crucial to an already thin unit. Harvin remains day to day, coach Pete Carroll said Tuesday on his weekly radio show. Carroll said the Seahawks pushed Harvin last week but were then forced to rest him.
Second-year receiver Jermaine Kearse -- now the tallest receiver at 6-foot-1 -- will likely get the bulk of the playing time in Rice's place until Harvin is ready to go.
Rice's knees have been bothersome to the point he traveled to Switzerland to have treatment during training camp and was brought along slowly in the preseason and at the start of the regular season. He's due $17.5 million in base salary the next two seasons, meaning his time in Seattle could be done without a significant restructuring of his contract.
Seattle (7-1), which has the NFC's best record, hosts the winless Tampa Bay Buccaneers (0-7) on Sunday.
Information from The Associated Press was used in this report.