The 26-year-old suffered an injury to his right knee in training last week and it has now been revealed as cruciate ligament damage.
A further scan will assess the full severity but Green is certain to face an operation in the coming weeks and will be sidelined for the rest of the 2013/14 campaign.
"Unfortunately we've had some bad news on Matt Green," Lee Clark told bcfc.com.
"He has done his cruciate ligaments and will be out for the foreseeable future, he certainly won't come back this season.
"He is seeing a specialist, who will decide when he does have the operation and also, when he opens the knee up, discover if there is any other damage.
"So we have lost Matt for the rest of the season which is hammer blow to us but, more importantly, a hammer blow to the lad.
"He has been working extremely hard. It has been a little bit up and down for him. He has had some great highs, where he has really looked very good for us. At other times, bridging that gap has been a bit tough. But we love his attitude and for him to have this setback, it's a big blow.
"It (the injury) was done on Thursday in training during the last part of the session. He was looking really, really bright and was coming back into my thoughts in regards to being involved in the 18 on Saturday at Huddersfield but this injury has taken him away from us.
"We have got him and Neal Eardley
out now but what I do know is that I have got a terrific medical team who can help those lads come back stronger than they ever were."
Green signed on a two-year deal during the summer
having spent the previous two seasons in sensational goal-scoring form for Mansfield Town in the Conference Premier. Since joining Blues, Green has made 12 appearances and scored twice.
The club would like to take this opportunity to wish Matt a speedy recovery.