Scans on Wednesday afternoon confirmed Morabito had torn the graft on his repaired left anterior cruciate ligament and would require another reconstruction.
The injury was sustained during a regular training drill at Fremantle Oval on Wednesday morning when Morabito reached to tackle teammate Tanner Smith.
Football operations manager Chris Bond said Morabito, who has not played at AFL level since his debut 2010 season, would require a great deal of support.
"Understandably, Anthony is devastated at the moment and the club will be working extremely closely with him and his family," Bond said.
Morabito, who had his most recent reconstruction last July, trained on Wednesday with no brace or strapping on his left knee and had only been held out of full contact drills.
The talented youngster had impressed on the track this summer and was closing in on his anticipated playing return early in 2013, having missed two years of football.
If Morabito and the club opt for traditional surgery, he will be ruled out for the entire 2013 season, throwing his career beyond this year into doubt.
Speaking earlier on Wednesday before the extent of the injury was known, Bond would not be drawn on the possibility of LARS surgery or Morabito's future AFL prospects if he required a third reconstruction.
Recruited with pick No.4 in the 2009 NAB AFL Draft, Morabito announced himself as a future star in 2010, playing 23 of 24 games in his debut season.
However, the powerful youngster has not played since Fremantle's semi-final loss to Geelong at the MCG in 2010.
Setbacks and soft-tissue injuries have complicated his return from both previous knee reconstructions despite Fremantle's ultra-cautious approach with the youngster.
