The 26-year-old will undergo surgery Tuesday.
Sanchez has been with the Colts since signing as an undrafted free agent in 2017, appearing in 59 straight games. He played in Sunday's game against the Tennessee Titans and punted five times in the 45-26 loss.
Sanchez also usually handles kickoffs for the Colts but didn't Sunday because of what head coach Frank Reich described after the game as a "physical issue."
He has been one of the more reliable punters in the NFL and ranks ninth with 47.2 yards per punt this season.
The production helped Sanchez earn a four-year, $11.6 million extension in 2019.