Subotic sustained the injury during Dortmund's 2-1 defeat at Wolfsburg in the Bundesliga on Saturday as he landed awkwardly following a first-half collision with Ivica Olic.
The Serbia international defender was replaced by Sokratis Papastathopoulos and taken for an MRI scan to reveal the full extent of the injury.
Dortmund coach Jurgen Klopp said after the game that it looked like Subotic may have severely damaged his knee, and the club confirmed the extent of his problem later on Saturday.
"Neven Subotic is injured for the rest of the season," a statement said on Dortmund's official website. "The central defender tore the posterior cruciate ligament and medial collateral ligament tear in his right knee.
"According to team doctor Markus Braun, the 25-year-old will be out for at least six months."
Subotic, 24, also took to his official Facebook page to confirm the results of his scan.
"Sadly I did not get good news regarding my injury," he wrote. "2 of my ACL's are torn. But no worries, I will be back stronger," he wrote.
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