The 6-foot-1 inch sophomore sustained the injury Oct. 14, the first day of preseason practice. He missed the season opener Nov. 12 against Columbia and played through pain during much of the past campaign.
Fellow sophomore Martynas Pocius, a reserve, also is recovering after successful surgery on his right ankle.
"Both Greg and Martynas played with these injuries the entire 2006-07 season," said Coach Mike Krzyzewski in a statement released by the school. "I am very proud of the toughness they showed in playing through their respective injuries and being important contributors to our team."
Paulus averaged 11.8 points, 2.2 rebounds and 3.8 assists per game last season, with a team-best 45 percent shooting average on three-point attempts in 33 games.
He was tied for fifth place in the ACC in three-point field goals.