The Spain international suffered the setback during Bayern's 2-0 win over Nuremburg on Saturday and is expected to miss seven weeks of action after he undergoes surgery on Monday.
He will be sidelined for Bayern's upcoming Bundesliga games as well as the opening fixtures of their UEFA Champions League defence.
Thiago had been linked with Manchester United in the close-season before joining former Barcelona boss Pep Guardiola at the Allianz Arena.
After being handed his Barca bow by Guardiola in May 2009, Thiago went on to make 101 appearances for the Spanish champions, and had played in two of Bayern's opening three Bundesliga games this term.
He captained Spain to UEFA European Under-21 Championship glory in June, scoring three goals in five games.
Bayern have recovered from losing the DFB Super Cup to Borussia Dortmund ahead of their Bundesliga campaign, winning their first three games of the league season.
