One of the most recognisable athletes in the women's competition, Molloy was a late withdrawal from Sunday's clash at RSEA Park with what was initially described by the club as "knee soreness".
The Swans struggled without their co-captain, failing to kick a goal in the first half of their 6.6 (42) to 4.2 (26) defeat.
But the match was overshadowed by news of Molloy's ruptured anterior cruciate ligament, which was eventually confirmed by club officials and swept around the Moorabbin venue at the opening bounce.
The 25-year-old hurt her right knee in an "innocuous" training incident during the week when she changed direction, and learnt her season was over just hours before the St Kilda clash.
Molloy has long been recognised as one of the superstars of the AFLW. (Dave Hunt/AAP PHOTOS)
"I never thought I'd be one to have that injury," Molloy said after the match.
"I was emotional, cried. I give so much to my football and there are so many expectations on me that my immediate response was I felt like I'd let down a lot of people.
"What ran through my head was, 'How am I going to tell this group of girls that I can't be out with on the field with them?'.
"The immediate response was sadness but now I look at it as an opportunity where my door now has closed on playing (this season) and I've got to find other ways to give."
Sydney's gloom was contrasted by St Kilda's delight after their 16-point win. (Morgan Hancock/AAP PHOTOS)
Molloy eventually addressed her teammates in the change room after the match and told them her news.
"It was a bit weird and you chuck on a bit of a poker face," she said.
"I had to mask it for a little bit because I did find out (earlier).
"I said, 'I'm so sorry I lied to all of you, I knew my (scan) results'.
"It was weird but also it's game day so I immediately went, 'What's my role today?'
"It wasn't to feel sorry for myself. I need to give to the team even if I can't be out there."
The news put a dampener on the Swans' weekend after a thrilling AFL men's qualifying final win over GWS on Saturday.
With three-time All-Australian Molloy sidelined, Sydney were fortunate to only trail St Kilda by six points - 0.6 to 0.0 - at quarter-time.
Three unanswered goals in the second term gave the home side a stranglehold on the contest, and heavy rain made for difficult conditions in the second half.
The Saints led by 28 points at the final change but had to withstand a late challenge when Montana Beruldsen and Sofia Hurley kicked quick goals to temporarily breathe life into the contest.
Tyanna Smith (left) had 19 disposals and kicked a goal in St Kilda's 16-point win over the Swans. (Morgan Hancock/AAP PHOTOS)
But Jesse Wardlaw's long-range goal iced the game with less than five minutes left.
Jaimee Lambert (21 disposals, five clearances) was one of the Saints' best, with fine assistance from Tyanna Smith (19 touches, one goal) and Molly McDonald (17, one).
Laura Gardiner (25 disposals), Brenna Tarrant (20) and Tanya Kennedy (18, six clearances) were busy for Sydney.
The result extended St Kilda's (2-0) winning start to the campaign and burst the Swans' (1-1) bubble after their win over Collingwood in the season opener.
Molloy is the second AFLW club captain to be ruled out for the season with an ACL injury in a matter of days, after Port Adelaide skipper Janelle Cuthbertson.
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