The Scottish international was stretched off five minutes before half-time in the 1-0 victory over Middlesbrough on Saturday after collapsing in agony off the ball and it was initially hoped that he had suffered only minor damage.
However, a scan on Monday night revealed a more devastating diagnosis and the 30-year-old now faces around 10 months on the sidelines.
Hammers boss Glenn Roeder, understandably devastated by the news, said: "Don has ruptured his anterior cruciate ligament and, in the worst case scenario, will be out of action for 10 months.
"Hopefully it will be sooner, and how quickly he returns all depends on the exact damage, how the operation goes, and how his rehabilitation is.
"We are disappointed firstly for Don and, at a close second, we are disappointed for ourselves as a team.
"He plays an integral role in the side, and for this to happen is very bad news."
Glenn, who worked so hard to bring Hutch back to Upton Park last September in a club record £5million deal, admits he will need to take temporary measures in order to fill the gap left by his absence but is sure that Don will fight his way back in the coming months.
"We are looking into the loan market in the immediate future to replace Don, but there is no reason not to think that he will make a 100% recovery and get back to playing.
"We are all devastated that this has happened and the club wishes him all the best."
Meanwhile, there was further bad news - although thankfully not as serious - for Steve Lomas, who is likely to be out for a month after sustaining his own knee injury against Boro on Saturday.
After making two comebacks already this season, the Northern Ireland captain will now be forced to make a third after a scan revealed medial ligament damage to his knee.
Club doctor Ges Steinbergs revealed: "Steve has a small tear in his medial ligament and will be out of action for around a month.
"It is the same knee that he injured before, but a different injury so he will only be out for a few weeks."
Said Glenn Roeder: "It has been an unlucky time for Steve and we are wishing him a speedy recovery."