India received a jolt ahead of the third Sydney Test which begins from January 7.
Yadav is expected to head off to National Cricket Academy in Bengaluru for an extensive rehab programme.
The 33-year-old had hobbled off the field after suffering the injury during the third day of the Boxing Day Test. India have already lost Ishant Sharma and Mohammad Shami due to injury.
This will also mean a new bowling combination headed by Jasprit Bumrah.
Reports suggest, Indian team management is likely to prefer Shardul Thakur over left-arm pace sensation Thangarasu Natarajan in the third Test against Australia in place of injured Umesh Yadav.
"While people are excited about the brilliant progress shown by T Natarajan, we mustn't forget he has played only one first class match for Tamil Nadu. And Shardul has been a seasoned domestic red ball pacer for Mumbai," a BCCI source privy to developments in Australia said on Thursday.
"Shardul was really unfortunate that his Test debut against West Indies ended abruptly due to injury even before he could bowl an over. He has been shaping up well and might replace Umesh in the playing XI," the source added.
The final call will be taken by the head coach Ravi Shastri, stand-in skipper Ajinkya Rahane and bowling coach Bharath Arun after reaching Sydney.
Shardul has so far played 62 first class games and has 206 wickets to show for his efforts.
Another aspect that India would like to address ahead of the Third Test is a long tail that has affected the team.
Shardul has six first class half centuries and during his stint with the national team in white ball games, he has proved to be a decent batsman.
"Obviously the next few training sessions will be important and that's why the final call is likely to be taken in Sydney," the source said. (With inputs from PTI)
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