Romero was expected to be Argentina's number one goalkeeper for the World Cup, but will be unable to take the gloves in Russia following his latest injury setback.
The goalkeeper was expected to start in goal for Manchester United in the FA Cup, but manager Jose Mourinho selected David de Gea due to Romero's lack of fitness.
And the 31-year-old, who started the World Cup final as Germany edged a 1-0 win over Argentina in 2014, will now miss the chance to represent his country in Russia.
[DESAFECTADO] Sergio Romero sufrió hoy un cuadro de bloqueo articular en su rodilla derecha que lo dejará fuera de la convocatoria.
— Selección Argentina (@Argentina) May 22, 2018
Argentina's final 23-man squad was named on Tuesday, with Inter captain Mauro Icardi cut from the initial selection confirmed by coach Jorge Sampaoli.
As well as Romero, the other two goalkeepers in the squad are Willy Caballero of Chelsea and River Plate's Franco Armani.
Argentina, who confirmed Romero requires surgery on his right knee, will announce a replacement for the goalkeeper in the coming days.
Photo Getty Images. Caption: Argentina goalkeeper Sergio Romero