Kerr averaged nearly 30 goals in the previous three seasons for Chelsea, who are top of the WSL table with a three-point lead over Manchester City. This season she had scored nine goals in the league and Champions League.
"Sam will be assessed by a specialist in the coming days and then begin her rehabilitation with the club's medical team," the club said in a statement, giving no timeframe on her return.
Kerr, who joined Chelsea in 2019, has scored 99 goals in 128 matches for the London side, winning the league four times, the FA Cup three times and the League Cup twice.
She has also won the Golden Boot twice, and was runner-up to Spain's Aitana Bonmati at the Ballon d'Or awards last year.
Australia said Chelsea had confirmed an ACL rupture, ruling her out for the rest of the season, which means Kerr will miss Australia's Olympic qualifiers and potentially the Paris Games later this year if the Matildas qualify without their captain.
"Considering how hard Sam has worked over the past six months to return to play, this news is a devastating blow for everyone," Australia women's head coach Tony Gustavsson said.
"With her ability to lead by example, Sam's guidance and influence on the team is significant and, as a result, this will be an incredible loss for the national team.
"Our focus now is on ensuring she has all the support she wants and needs to navigate recovery and rehab."
Kerr is one of the sport's most popular figures and was the first female player to feature on the global cover of the FIFA video game in 2022 alongside Kylian Mbappe.
She joins a long list of women's players who have suffered ACL injuries, which usually take at least nine months of recovery before a return to action.
ACL injuries were the talk of the women's World Cup last year after England's Beth Mead and Leah Williamson, Vivianne Miedema of the Netherlands and Canada's Janine Beckie missed the tournament.
Global soccer players union FIFPRO said an increased workload, travel and insufficient rest have contributed to an increase in injuries, including torn ACLs, among women's professional players.
In December, European soccer governing body UEFA introduced a women's health expert panel to seek a deeper understanding of ACL injuries and their occurrence in the women's game.
