Smith, playing in his first game on Saturday, dislocated his shoulder in the opening quarter of Melbourne’s win over St Kilda, ending his day prematurely.
The 21-year-old will undergo a full shoulder reconstruction.
“After consulting specialists and our own medical team we’ve decided Joel will go in for an operation to reconstruct the shoulder,” Melbourne football manager Josh Mahoney said.
“We took this course of action as Joel is a young player and we wanted to ensure his long-term shoulder strength remained a priority.
“We expect Joel’s recovery from surgery to be between three and four months.
“This is disappointing for Joel who had earned his debut on the weekend and had made a bright start to the game in the first 20 minutes.”