The Brazilian was a late casualty in Sunday's Ligue 1 clash with Marseille, in which the French leader ran out 3-0 winner, goal.com reported.
While preliminary tests ruled out a fracture or serious sprain in the joint on Sunday evening, subsequent examinations revealed he has fractured a metatarsal bone in his foot.
"Complementary examinations performed today (ultrasound and CT) confirmed an external sprain of the right ankle but also the associated existence of a fracture in the fifth metatarsal," a statement released by PSG on Monday confirmed.
PSG did not provide a timeline for Neymar's return, but the injury typically requires a minimum of one month on the sidelines — essentially confirming he will not be able to take part in PSG's bid for Champions League revenge against the Blancos.
Unai Emery's men trail 3-1 from the first leg of their last 16 clash, despite taking the lead at the Santiago Bernabeu through Adrien Rabiot's early goal.
And the news that the Brazilian talisman is missing comes as a massive blow as PSG seeks to make the quarterfinals in a game scheduled for March 6 at Parc des Princes.
Neymar posted an injury update to his Instagram story early on Monday, displaying his heavily strapped ankle to his 90 million followers.
In addition to Neymar's injury, PSG confirmed center-back Marquinhos suffered a thigh injury against Marseille.