The 28-year-old right-hander was placed on the 15-day injured list on Aug. 26, one day after he was hurt during a game against the Colorado Rockies.
"That was kind of the long-term conclusion as soon as we had our arms around the injury," general manager Mike Elias said Saturday.
Elias also said Bautista had agreed to a two-year contract. Bautista would have been eligible for salary arbitration after the 2024 season.
Bautista had hoped to return for the playoffs, Baltimore's first postseason appearance since 2016. The American League East champions open the division series on Oct. 7.
"To Felix's credit, bless his heart, he realized there might be a window to keep his arm throwing, up and running," Elias said. "But we just ran out of time for this to be a feasible and successful option for the postseason, and it stopped making sense, so we went ahead and scheduled the surgery. There's nothing that changed or nothing that happened in the last couple of weeks that he's been throwing."
Bautista was 8-2 with a 1.48 ERA and 33 saves in 39 chances. The first-time All-Star struck out 110 of 237 batters.
"He should be back to being Felix Bautista in the spring of 2025," Elias said.