The 23-year-old sustained the injury midway through the first half of Napoli's 1-0 win at Fiorentina in Serie A on Sunday.
Napoli's worst fears were confirmed on Monday with the news the Italy international had suffered serious damage and is set to go under the knife this week.
"Insigne has a rupture of the anterior cruciate in his right knee," a brief statement on the Naples club's official website said.
"This is the outcome of the diagnostic analysis for Insigne who, accompanied by Dr. D'Andrea, went to Professor Mariani at Villa Stuart for clinical examination after the accident yesterday in Florence.
"The attacker will undergo surgery in the coming days, to be carried out by Professor Mariani."
Napoli have not put a timescale on Insigne's recovery, but it is feared that the forward could miss the remainder of the campaign.
