The former FC Porto man went off late in the first half of Sunday’s 3-2 loss to Arsenal with a knee issue.
Liverpool boss Jurgen Klopp had said post-game that he would require scans, for which the results have since been received by the club.
It is understood Diaz will not require surgery on the injury but it will sideline him for approximately 10 weeks.
The Premier League season will halt for the World Cup break on November 13, resuming on Boxing Day, when Diaz is likely next available to the Reds.
Diaz’s Colombia failed to qualify for the World Cup, meaning he will have an ideal opportunity to recover.
The Reds are also sweating on an ankle injury to Trent Alexander-Arnold picked up against Arsenal.
Klopp will offer further insight on the pair’s injuries when he fronts the media on Tuesday ahead of their UEFA Champions League clash with Rangers on Wednesday.
Liverpool are 10th on the Premier League with 10 points from eight games, ahead of a tough fixture against champions Manchester City.