Clady was injured while blocking on a pass play during an 11-on-11 drill. He was treated by trainers after he went down and did not participate for the rest of the practice, but he remained on the field, limping slightly.
"He pulled himself out (of drills), said his knee was sore," Broncos coach Gary Kubiak said. "We really weren't that worried last night, everybody felt good, but we felt like we'd take a look at it this morning, and unfortunately we got some horrible news.
"Just devastating -- just feel bad for Ryan."
Denver drafted former Colorado State offensive tackle Ty Sambrailo in the second round this year, and he worked out at left tackle in practice Thursday. The Broncos also agreed to terms Thursday with former draft pick Ryan Harris for depth at the position, sources said.
Clady previously blew out his left knee in a pickup basketball game in April 2010, only to return and still start every game for Denver that season. This will be his fourth major surgery in the last five years, with the others coming on his left knee, shoulder and foot.
Kubiak said Clady will wait seven to 10 days for the swelling in the knee to go down before having the surgery. Denver won't officially rule him out for 2015 until after the procedure.
"We're going to get it taken care of and then make some decisions," Kubiak said.
A first-round pick in 2008, Clady is the last remaining player from Mike Shanahan's 14-year tenure as Broncos coach.
A four-time Pro Bowler and two-time first-team All-Pro, Clady has started 16 games in six of his seven NFL seasons. He missed most of 2013 with a Lisfranc injury to his left foot -- not long after signing a five-year, $52.5 million contract -- but the Broncos ended up scoring a single-season record 606 points that year.
ESPN.com Broncos reporter Jeff Legwold, ESPN NFL Insider Adam Schefter and the Associated Press contributed to this report.