He got scans on Monday and the news was the worst possible for the Suns – a ruptured ACL that requires a reconstruction.
"Unfortunately the scans have shown Zac will require reconstructive surgery to his right knee," Gold Coast general manager of football operations Marcus Ashcroft said.
"Zac and the club's medical team will meet with the surgeon to determine when he will undergo surgery.
"Zac will miss the rest of the 2013 season and will be in rehabilitation mode when the 2014 pre-season commences."
Smith is the League's 14th ACL victim this year (St KIlda's Daniel Markworth also ruptured his in December).
Gold Coast coach Guy McKenna told SEN Smith may have initially sustained the injury while trying to sidestep Will Minson midway through the first quarter, before ultimately damaging it with an innocuous jump minutes later.
"It's shattering news for the big fella, he's been a real key for us," McKenna said.
"To lose Zac like that is sad. He's got a good mentor like (assistant coach) Matty Primus who has done three, so he's in good hands, but we'd much prefer him playing of course."
The 23-year-old has played 44 games with the Suns since making his debut in the club’s first match against Carlton in 2011.
After a disappointing 2012, Smith has recaptured something approaching his best form this season.
His loss is a huge blow for Gold Coast, that is also without fellow ruck Charlie Dixon, who has missed the past two matches with an ankle injury.
He is still in a moon boot and McKenna described as a "long shot" to play Hawthorn at the MCG on Sunday.
He said one-gamer Tom Nicholls was slightly edging highly-touted Daniel Gorringe to fill the ruck role.
"Tom Nicholls is just finding his feet. Technically he's a very sound ruck ... he's got some form in the lower levels," McKenna said.
"He would certainly, at this stage, have his nose ahead."
Michael Whiting covers Gold Coast news for AFL.com.au. Follow him on Twitter: @AFL_mikewhiting