- Brooks: New wave of Aussies growing up
Franjic, 26, was replaced early in the second half by Ryan McGowan and Australia coach Ange Postecoglou told domestic media on Saturday that medical scans showed a ''fairly significant tear.''
The defender had a difficult start as Australia conceded two early goals, but played a role in the comeback with a cross in the lead-up to Tim Cahill's goal that made it 2-1 before half-time.
His absence leaves a hole for Australia at right-back for Wednesday's match against Netherlands, with McGowan likely to continue in place of the Brisbane Road full-back.
"Shattered to get the bad news that ends my World Cup but I would not change anything for the world," Franjic wrote in a post on his Instagram account. "Everything happens for a reason in life and this will only make me stronger.
"I will be standing by the boys all the way and still believe we can progress from the group stage."