Diaz, one of the few bright spots in the terrible season so far, limped off shortly before half time after Arsenal midfielder Thomas Partey landed on his knee.
The 25-year-old winger left the Emirates Stadium on crutches and in a knee brace, and now on Monday evening reports have confirmed he faces around six to eight weeks out.
That means he will miss all 10 of the remaining fixtures before the break for the World Cup, which Colombia are not qualified for.
Colombian journalist Pipe Sierra confirmed the news after a preliminary examination on Monday.
It is expected that a further examination will take place on Tuesday, when the full extent and more details will be known.
Diaz’s injury will not require surgery and it has been suggested by injury experts that he has suffered a MCL (medial collateral ligament) injury.
Jurgen Klopp will hold his pre-match press conference ahead of Rangers on Tuesday night (7.30pm) and no doubt provide a further update.
“Luis Diaz, it doesn’t look good,” said Klopp post-match on Sunday.
In his absence, Diogo Jota will likely have to move to the left-sided role he began his Liverpool career in.
Liverpool also awaiting news of the extent of Trent Alexander-Arnold‘s injury.