Medial knee ligament damage was the final verdict on the injury the midfielder had suffered following a rough challenge, and it's believed the player could miss three to four months of action.
The news is a major blow for David Moyes, who is already facing an injury crisis with 13 of his senior squad members on the sidelines.
Moyes and West Ham were already on the lookout for a midfielder this window and launched an unsuccessful £18m bid for highly-rated Fulham captain Tom Cairney. It is unclear whether or not West Ham will follow up with another bid for Cairney, or turn their attention elsewhere with funds few and far between.
West Ham sat four points off the relegation zone before Tuesday's game with Crystal Palace, but have improved dramatically since David Moyes took over the reigns from Slaven Bilic at the Olympic Stadium.
Obiang's injury, however, will only step up the search for a midfielder as the window nears its end.