Newton aggravated the Lisfranc injury, originally sustained in the third preseason game, in a Week 2 loss to Tampa Bay. He has not markedly improved from rehabilitation.
After Newton visited with foot specialist Dr. Robert Anderson on Friday in Green Bay, Wisconsin, management decided it would be best for the quarterback and the team to shut down Newton, the 2015 NFL MVP, for the rest of the season.
"For the past seven weeks, Cam has diligently followed a program of rest and rehab and still is experiencing pain in his foot," general manager Marty Hurney said in a statement. "He saw two foot specialists last week who agreed that he should continue that path prescribed by the team's medical staff and that it likely will take significant time for the injury to fully heal.
"We have said all along that it is impossible to put a timetable on this injury. Nobody is more frustrated with that fact than Cam.''
Before this injury, the first pick of the 2011 draft had missed only three starts in seven years.
On Tuesday afternoon, Newton responded to an Instagram post by the Panthers, saying that "Charlotte & @panthers will forever be in my heart !! I will work my tail off to be stronger, faster, SMARTER, AND ACCURATER for you guys !! until then I will continue to support the hell out of the @panthers and for @kyle_allen and @willgrier7 !!"
The Panthers will move forward with second-year undrafted quarterback Kyle Allen, who is 5-1 as the starter this season and 6-1 in his career. Newton had lost eight straight games dating back to last season.
Newton, 30, has one year left on his contract. He is scheduled to count $21.1 million against the 2020 salary cap. Should the team decide to move on from him after this season, it would clear $19.1 million in cap space.
Newton leads the Panthers in career touchdown passes (182) and rushing touchdowns (58). He is the first quarterback in NFL history with at least 50 rushing touchdowns, the most in league history.
He is third on the NFL's all-time rushing list for quarterbacks with 4,806 yards. Michael Vick leads the way with 6,109, followed by Randall Cunningham with 4,928.
"He's one of the fiercest competitors I've been around during my 20-plus years in the league,'' Hurney said. "At this time, we have decided that the best decision to reach the goal of bringing the foot back to 100 percent is to place Cam on injured reserve."