Dagg won't return this year
Dagg aggravated a long-standing issue in September's 39-22 victory over Argentina in the Rugby Championship, in which he scored a try, his sole outing of the competition.
Steve Hansen had offered a downcast review on Dagg's fitness when ruling the 29-year-old out of last week's Test against South Africa, which New Zealand won by a crushing 57-0 scoreline.
"It doesn't look great at this stage," he said.
"It looks like he might need some time away from the game but until I get more information it would be pointless to tell you how long or what is wrong."
The All Blacks revealed on Twitter that Dagg does not require surgery to fix the issue, but he will play no part in the remainder of the Rugby Championship, nor New Zealand's November tour of the Northern Hemisphere, which sees them take on France and Wales among five matches.
UPDATE: @izzy_dagg will rest and rehab his knee for the rest of the year and return to rugby in 2017. No need for surgery.
— All Blacks (@AllBlacks) September 22, 2017
Return in 2017 or 2018?
— rugby365.com (@rugby365com) September 22, 2017
Dagg underwent knee surgery in March after picking up an injury playing for Crusaders in Super Rugby, but he returned to fitness in time to play in all three of the All Blacks' Tests against the British and Irish Lions.
He joins experienced prop Owen Franks and breakout star of the Lions tour, Jordie Barrett, in sitting out the rest of 2017 due to injury.
* Meanwhile Beauden Barrett has been recalled to the All Blacks side after Lima Sopoaga’s unavailability for the trip to Argentina and South Africa.
Source: RugbyPass
UPDATE: @beaudenbarrett is to replace @LimaSopoaga on tour to Argentina. Sopoaga& his partner are awaiting the birth of their first child.
— All Blacks (@AllBlacks) September 22, 2017