The All-Star guard will be sidelined for approximately six weeks before resuming basketball activities.
Holiday suffered the injury earlier this month against the Utah Jazz but wasn't originally ruled out for the season. The 6-foot-4 guard averaged a career-high 21.2 points along with 7.7 assists and five rebounds per contest in 67 appearances during 2018-19.
New Orleans is 31-44 and will miss the playoffs for the third time in four years. However, the team did reach the second round last season.