It was also a personal setback for 33-year-old Ballack, who was set to play at his third World Cup and is unlikely to get another chance to perform on the sport's biggest stage.
The Chelsea midfielder was injured in the first half of Saturday's FA Cup final against Portsmouth, limping off during during his team's 1-0 win after a late tackle by Kevin-Prince Boateng.
"There's naturally a lot of disappointment. It's bitter to get a diagnosis like that two or three weeks before the World Cup. But that's football. That happens. Life goes on," Ballack told German television.
"He (Germany coach Joachim Low) is naturally disappointed. I'll fly down there now and we'll let it all sink in," added Ballack, who broke off the interview and hobbled away on crutches.
"Michael Ballack is a very important player for us, in the decisive matches he often played a very, very important role for us, a central role for us," he said.
"I talked to Michael. He's deeply disappointed. He put all his energy and power into playing in this World Cup.
"He's near his 100th cap. That would have been a match in Frankfurt against Bosnia.
"That's an immense disappointment for him to not be able to play in this World Cup.
"I called the team together and passed along the information. It's very very unfortunate for us. But it shows we have to pull all our strength together and look forward. We've got a lot of young players."
"According to the diagnosis today by national team physician, Dr. Hans-Wilhelm Muller-Wohlfahrt, a complete recovery can be expected but a return to training will not be possible for at least eight weeks," said a statement.
German-born Boateng, booked for the tackle, is in the provisional squad of Germany's first-round opponents Ghana.
"I'm deeply sad that Michael Ballack will miss the World Cup because of a foul like that. He has done an enormous amount for German football in the last few years and would have deserved to take part in this tournament," he said.
"It's bitter that the captain, with such experience is out of the tournament," Germany defender Philipp Lahm told reporters at Bayern Munich's training ground.
"I also feel personally sorry for him, because it would have been his last World Cup."
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