Panthers assistant coach Steve Wilks made the announcement on Sunday after practice. Hill was injured on Saturday when he attempted to catch a pass over the middle and landed awkwardly on his leg. He screamed as he fell to the ground.
Hill, a former second-round draft pick by the New York Jets in 2012, spent last season on the Panthers' practice squad.
He had impressed coaches in OTAs and minicamp with his play. However, he was cited Tuesday by police in Concord, North Carolina for knowingly possessing drug paraphernalia with intent to use, raising concern about his status.
The Panthers signed Paul Browning to take his place on the roster.
AP NFL website: www.pro32.ap.org and www.twitter.com/AP-NFL