The midfielder fractured a ''couple of bones'' in his left hand while training on Tuesday.
He was making a tackle and fell awkwardly, bending his fingers back. The injury has left his Mitre 10 season in tatters as he is expected to be sidelined for up to eight weeks.
The best-case scenario would see Faddes return in time for the final round-robin game against Southland in Dunedin on October 14.
It is the second time Faddes has been forced to miss a big game because of a hand injury this season.
He fractured a bone in his other hand during a Super Rugby fixture against the Crusaders in June which ruled him out for the Highlanders' match against the British and Irish Lions later that month.
The 25-year-old was bitterly disappointed to miss what was a memorable game and a famous victory for the Highlanders. And he was desperate to play in Shield match.
''I'm gutted,'' he said.
''It would have been my first crack at the Ranfurly Shield. This is my seventh year in the side but I've never actually stripped for a Ranfurly Shield game.
''I was really looking forward to it.''
Faddes said injuries were a part of the sport and he was trying to remain positive.
''The first time I'd broken a bone was when I broke my other hand, so there are a lot worse than me out there. When you look at Hayden Parker [Otago first five-eighth], he has had back-to-back-to-back serious injuries.
''I'm not doing it too bad considering,'' he said, adding he might need to ''drink a bit more milk''.
Faddes, who plans to travel to Christchurch to ''watch the boys hopefully lift the Shield'', will find out next week whether his injury will require surgery.
Faddes was shaping as a key plank in the Otago midfield and his absence will rob the team of a potent attacking force.
Sio Tomkinson, who started on the wing against North Harbour, will shift in a spot and Leroy van Dam will provide midfield cover from the bench.
Otago coach Cory Brown said he felt for his charge but it was also an opportunity to see what Tomkinson could offer in the role.
''It is really disappointing for Matt because he was really looking forward to the challenge on Sunday and being part of that game,'' Brown said.
''You can't put in the paper what he said [when it happened].''
Tomkinson, though, is a bruising defender and is better suited to centre than on the wing.
''There is no doubt he has a physical presence about him with and without the ball and I'm looking forward to seeing how he goes.''
However, Faddes' X-factor on offence will be hard to replace.
''That is definitely Matt's point of difference and we are going to miss that. But it gives Sio that opportunity to spend a bit of time in the midfield throughout the Mitre 10 Cup.''