The incident occurred in the closing stages of the first half against Melbourne Storm when the second row forward was tackled by three players, one of whom lifted one of McKinnon's legs off the ground.
McKinnon was fitted with a neck brace and carried off the pitch on a stretcher before being taken for scans at a Melbourne hospital, where his family later joined him.
"Scan results for Alex McKinnon confirm a fracture at C4 and C5," said a statement on the Newcastle Knights website.
"His spinal cord is not severed but the doctors are unsure about the level of spinal cord compromise.
"It will be a number of days or weeks until the extent of his injury is known."
Injuries to the cervical spine, the area around the neck, are among the most serious to occur in contact sports like rugby, with outcomes ranging from complete recovery to death.
Rugby union has in recent years doled out heavy punishments to try to rid the code of tip, or spear, tackles which result in players landing forcefully on their heads.
The Melbourne Storm tacklers - Jordan McLean and brothers Kenny and Jesse Bromwich - were put on report after the incident and could be punished after a review of the footage by a disciplinary committee.
NRL chief Dave Smith told local media that spinal injuries were thankfully extremely rare in rugby league.
"Our entire focus is on Alex's wellbeing and we wish him a full recovery," he said.
- Sports & Recreation
- Melbourne Storm
- Alex McKinnon