The Swans confirmed the gun midfielder had surgery last week, with the Seven Network reporting Mills suffered the injury while wrestling with a teammate at the traditional season-ending 'Mad Monday' celebrations.
Sydney would not put a timeline on Mills' return but his recovery is sure to eat into the pre-season, if not the start of the Swans' 2024 campaign.
"Losing players to injury in the off-season is always disappointing," Swans football boss Charlie Gardiner said in a statement on Tuesday.
"Callum is our captain and an important member of the squad. We are extremely disappointed this injury has occurred.
"Callum is equally disappointed, as you can imagine, but he is recovering well and will get to work on his rehabilitation immediately."
Mills missed most of the 2018 season after breaking his foot in a bizarre accident.
In May of that year, the Swans announced Mills was throwing an American football with teammates on the way back from a cafe when he tripped and fell.
The 26-year-old has played 155 games since his 2016 debut, originally at half-back before moving into midfield.
Last year's grand finalists, Sydney finished eighth this season and were knocked out by Carlton in the elimination final.
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