The Otago loose forward is out of rugby for eight to 10 weeks and his chance to get a Commonwealth Games gold medal has disappeared, along with any hope of making the end of year All Black tour.
Thomson, playing his 50th game for Otago against Northland at Carisbrook on Sunday, injured the medial ligament in his right knee near the end of the game, and was forced off.
He underwent an MRI scan on the injury late yesterday and it was diagnosed as a grade two medial ligament strain, which means an eight to 10-week lay-off.
He does not need an operation and just needs to rest the injury before he gets back into playing next year.
It is a cruel blow for Thomson who had his eye on gold at the Delhi games, and was a candidate to make the All Black end of year tour.
He suffered the injury when Northland halfback Luke Hamilton was attempting to score.
An Otago player tried to stop Hamilton, and in doing so banged into Thomson who was standing by the ruck and took the weight of his Otago team-mate on to his knee.
The injury ended what has been a very mixed year for the Otago forward, who debuted for the All Blacks in 2008.
This season he had an impressive Super 14 with the Highlanders and was rewarded with selection for the All Blacks for the June internationals.
But he got a limited run in those games and was subsequently dropped for the Tri-Nations and told by the selectors to go away and work on his game.
He had been in impressive form for Otago in the past few weeks and loomed as a candidate for the end of year tour, fighting for a place in the loose forward mix.
He re-signed for the Highlanders earlier this month after being courted by other Super rugby franchises.
His absence from the Commonwealth Games will be a loss for coach Gordon Tietjens, who may look to the likes of Bay of Plenty loose forward Solomon King as a replacement.
Otago coach Phil Mooney said the injury was extremely disappointing for Thomson, who Mooney said had a superb game on Sunday.
"But the positive for him now is that he gets an extended rest and a longer lead-in to the next Super rugby season," Mooney said.
"He can start the season next year well ahead of everybody else and, as we know, that is an extremely important season for him."
Thomson's absence will be a huge hit for Otago, which has struggled on the field this season.
Thomson, along with outside back Ben Smith, was going to miss three games because of the Commonwealth Games, but Thomson will now also miss Friday night's game against Bay of Plenty in Rotorua.
Taieri No 8 Charlie O'Connell looms as his replacement for Otago.
