Gaffney was Carolina's sixth-round draft pick out of Stanford and was expected to provide some depth in the backfield.
Panthers coach Ron Rivera said Saturday night after practice that Gaffney will have surgery next week and will be placed on injured reserve.
''We're disappointed for him and we're disappointed for us because he certainly fit what we do,'' Rivera said.
Gaffney started 14 games last season for Stanford and led the team with 1,709 yards rushing on 330 carries.
Rivera said Gaffney injured his knee in Friday night's Fan Fest while attempting to make a cut. Gaffney left practice early, but didn't appear to be seriously hurt at the time.
An MRI showed differently.
''It was on a running play,'' Rivera said. ''He ran a sweep coming out to our offensive left (side). He made a really nice cut. It was a bump and a little bit of a turn on the knee and he said he felt it pop.''
Gaffney had 486 carries last season, second-most in Stanford history.
He ranked first in the Pac-12 and fifth in the nation with 21 touchdowns rushing. He compiled nine 100-yard rushing performances, the second most in Stanford history.
The 6-foot, 220-pound Gaffney stood a good chance to make Carolina's roster even with a crowded backfield that includes veterans DeAngelo Williams, Stewart and fullback Mike Tolbert.
Rivera said the Panther plan to sign another running back, particularly with Stewart hobbled by a hamstring injury.
Rivera said the team will miss Gaffney's toughness, calling him a ''workhorse style of back. He's similar in stature to Jonathan Stewart. He runs like Jonathan and he would have been a good (insurance) policy for us.''
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