NFL.com's Ian Rapoport reported Sunday the injury was a torn ACL.
Nelson hurt his knee during the Packers' preseason game against the Pittsburgh Steelers on Sunday. After making a catch, Nelson turned, slipped and fell to the turf.
Nelson had 98 catches for 1,519 yards and 13 touchdowns last season. In his seven-year career, Nelson has 400 catches for over 6,000 yards and 49 touchdowns.
Nelson signed a four-year, $39 million contract with Green Bay in July of 2014.
Nelson posted a message on Facebook after receiving the diagnosis.