Murphy, acknowledged as the best left-back in the Championship by Blues boss Lee Clark, underwent an exploratory knee operation on Thursday evening to assess the damage sustained during last weekend's home defeat to Hull.
And the club's fears have been realised, with Murphy having sustained cartilage damage.
The 28-year-old will now start his rehabilitation ahead of a scheduled pre-season return next summer.
Birmingham have already extended former West Brom and Bolton defender Paul Robinson's short-term deal for a further two months until January 27, but that could now be prolonged until June.
