Fitzgerald blow for Ireland ahead of SA tour
Fitzgerald suffered the problem playing for Leinster in Saturday's Pro12 Final defeat against Connacht at the weekend.
The 28-year-old had been named in Schmidt's squad last week ahead of the three-Test tour.
Schmidt views the uncapped Matt Healy of Connacht as the likely replacement for Fitzgerald, but Tiernan O'Halloran is also in contention.
"Unfortunately Luke Fitzgerald picked up a knee injury in the game and he will be replaced," Schmidt said.
"Due to Luke picking up the knee injury one of those Connacht players is likely to be in the frame to be his replacement.
"One of the advantages with Matt is that he's a left-footed left winger and like for like with Luke. He's certainly a guy who's in contention."
Ireland face the Springboks in the first Test in Cape Town on June 11 with further Tests scheduled in Johannesburg and Port Elizabeth.
Agence France-Presse