The 22-year-old was forced off in the defeat to West Ham on Saturday, despite initially re-entering the field to try and play on after receiving treatment on the field.
Neto saw specialists this week and now requires surgery on his ankle, meaning he will be sidelined for several months and miss the World Cup.
The winger, who only returned last season from a fractured patella that saw him sidelined for 10 months, made the latest Portugal squad but did not play in their Nations League games.
In a statement from Wolves' medical team, they also provided updates on Hwang Hee-chan and Bruno Jordao.
It read: "Pedro sustained an ankle injury against West Ham on Saturday where he strained the lateral ligaments.
"Following further evaluation and a specialist opinion this week, it is planned for him to undergo surgery. This means that, unfortunately, he will not be fit for the upcoming World Cup.
"Hee-chan has made good progress this week and has rejoined team training.
"Bruno Jordao injured his groin while on loan at CD Santa Clara in September and was unable to play with confidence after rehabilitation. He has therefore returned to the UK to undergo groin surgery. He is expected to return to play in the New Year."