The 30-year-old was injured batting in India’s second innings and forced to retire hurt as his side were knocked over for 36, before Australia eased to a stunning eight-wicket win at Adelaide Oval on Saturday.
Shami didn’t bowl as Australia chased down the target and scans have since revealed the extent of the injury, having sustained a fracture to his right forearm.
The Board of Control for Cricket in India (BCCI) are yet to confirm the news but it has been widely reported.
Among Shami’s potential replacements are Kartik Tyagi, T Natarajan and Shardul Thakur, who were all not originally part of the Test squad but stuck around after the white ball series.
It is likely India’s pace attack for the Second Test will include three of Jasprit Bumrah, Umesh Yadav, Navdeep Saini and Mohammed Siraj, along with Ravi Ashwin.
Captain Virat Kohli has already left the India camp for the remainder of the series to be with his wife for the birth of their first child.
The tourists are reeling after their Test record low score of 36, and have a mountain to climb to reverse the result when the two sides meet from Boxing Day at the MCG.
Ajinkya Rahane will now skipper India, who also need to weigh up who comes into the batting line-up for Kohli.
Among the options are 2020 IPL top scorer K.L. Rahul, white ball gun Rohit Sharma or opening batsman Shubman Gill, whose inclusion could force a re-shuffle.