Padgett, the team's co-captain, will undergo surgery at a date yet to be determined.
"Over the last few days, his condition has deteriorated," said Louisville Coach Rick Pitino. "The doctors say it's in his best interest to have the surgery now so he can begin the process of preparing for his return to the court."
Padgett's knee became inflamed after he sprained it during a Nov. 12 intrasquad scrimmage. He managed to play through the injury but has sat out many practices to rest the knee.
The 6-foot-11, 250-pound sophomore is averaging 11.9 points and 6.1 rebounds for the 16-9 Cardinals. He leads the team in rebounding, blocked shots (34) and field goal percentage (.582).