Gagne suffered his third concussion in five months Feb. 10.
"Simon was seen by Dr. (Jim) Kelly today," Holmgren said. "His advice to Simon was to shut it down for the remainder of the season. As soon as we have had the opportunity to speak further with Dr. Kelly and Simon, we can shed more light on this. Needless to say, we are very disappointed with this news."
Gagne is the latest member of the Flyers to deal with multiple concussions.
Eric Lindros, who retired last year, suffered from post-concussion syndrome, as did one-time Philadelphia captain Keith Primeau. Jeremy Roenick, now a member of the San Jose Sharks, had multiple concussions while with the Flyers.
Gagne has 208 goals and 202 assists in 527 career games, all with Philadelphia.