The 34-year-old damaged the cruciate ligaments in his right knee after an awkward fall shortly before half-time in the 2-1 Apertura victory over Lanus.
Boca team doctor Jose Veiga told Radio La Red that Palermo 'will undergo surgery in 48 hours'. The operation is expected to take place on Tuesday.
Viega added: 'We found out exactly what we didn't want to discover.
'Martin firstly injured the inner ligament and then the effort tore the cruciate ones. He will need five to eight months to recover.'
This is the second time Palermo has injured his right knee, having suffered a similar injury in 1999.
Palermo's team-mate Juan Roman Riquelme, who took gold with Argentina at the Beijing Olympics at the weekend, was shocked by the news.
'I have just been told Palermo got injured and I am deeply sad,' Riquelme said on his arrival in the Argentine captial from China.
'I was happy to hear about the victory but then I was told about this. It's terrible.'
Earlier this month, Palermo scored his 194th goal for Boca to level Francisco Varallo as the club's record scorer. Varallo has held the record since 1939.
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