The France striker missed Saturday's 3-1 win over Malaga with the problem and looks set to be sidelined for the second leg of Real's Champions League quarter-final.
"Following tests in the Hospital Sanitas La Moraleja by the Medical Services of Real Madrid, Karim Benzema has been diagnosed with a sprained medial collateral ligament in his right knee," a club statement read.
Carlo Ancelotti is expected to offer further injury updates on Gareth Bale and Luka Modric at Tuesday's news conference.
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