Yankees general manager Brian Cashman confirmed that the 26-year-old Dominican would miss the entire 2020 campaign after suffering a partial tear of his ulnar collateral ligament, requiring Tommy John surgery.
The injury could also mean Severino misses the early part of the 2021 season.
Severino had been suffering soreness in his right forearm since his last appearance in the American League Championship Series in October.
Two doctors who evaluated Severino in New York on Monday both recommended surgery, leaving the right-handed ace facing a season on the sidelines.
"Sevy has agreed and acknowledged that Tommy John is necessary," said Cashman.
"The plan is to have it done as soon as possible, and he's obviously contemplating the doctors that he'll do it with."
Severino has struggled for fitness since dominating for the Yankees in the 2017 and 2018 campaigns, when he won 33 starts on the mound against 14 losses, with a 3.18 earned run average.
However a variety of injuries limited his appearances last season before he finally returned in September ahead of the playoffs.