Ozil underwent scans earlier on Wednesday to assess the extent of the problem ahead of Germany's Euro 2016 qualifiers with Poland and the Republic of Ireland.
And the 25-year-old could now be on the sidelines until the New Year after the German Football Association (DFB) confirmed that the midfielder has sustained ligament damage in his left knee.
The DFB posted on Twitter: "@MesutOzil1088 out for 10-12 weeks with partial lateral collateral ligament tear in left knee. Get well soon!"
The news comes as another severe blow to an Arsenal side that has been dogged by a number of significant injuries so far this season.
Striker Olivier Giroud (foot) and defender Mathieu Debuchy (ankle) are both out until December, while midfielders Mikel Arteta (calf) and Aaron Ramsey (hamstring) remain out of action with striker Theo Walcott (knee).
Ozil's injury will see him miss the rest of Arsenal's UEFA Champions League group-stage campaign as well as the Premier League clash with Manchester United in November.
Depending on the exact length of his absence, Ozil could also be unavailable for the trip to Anfield to face Liverpool in December.
