Smith had looked sharp across half-forward in his first senior hit-out during the Blues' pre-season clash with St Kilda at Ikon Park on Saturday.
The 19-year-old limped from the field with a knee injury during the third quarter but was able to complete some post-match running in what was taken as a positive sign.
But scans on Sunday revealed the worst possible result for Smith, who was selected with the No.3 pick at last year's draft.
"It certainly was not the news we were expecting and we really feel for Jagga," Carlton football manager Brad Lloyd said.
"He has not put a foot wrong from the second he walked into the football club back in November.
"Jagga possesses incredible professionalism for someone so young and an absolute dedication to push himself to get better every single day - two qualities which will have him in a strong mindset to progress through every stage of his rehab.
"While it is really unfortunate we won't see Jagga out of the field this season, he will continue to soak up as much knowledge as he can from his teammates and coaches during his first year in the AFL system, before setting himself to attack his second season head on."
Carlton are hopeful star midfielder Sam Walsh (hamstring) could be fit to play in the final pre-season hit-out against GWS on Friday.
The Blues start the home-and-away campaign against Richmond on March 13.
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