Lydiate, who was voted player of the tournament in last season's RBS 6 Nations Championship, went off just three minutes into Newport Gwent Dragons' RaboDirect PRO12 clash against Edinburgh at Rodney Parade.
The 24-year-old was unable to put any weight on his left leg, and BBC Sport Wales have reported that he is set to undergo surgery on Sunday.
Early indications are that he has suffered a fractured and dislocated ankle.
Wales kick off their four-Test autumn programme against Argentina on November 10, and there must also be doubts over his availability for the Six Nations in February and March.
Lydiate, meanwhile, is viewed as a strong Test team contender for the British and Irish Lions against Australia Down Under next summer.
Gilbert has released a new line of rugby cleats. The Gilbert Virtuo 8S is part of the exciting new product. Check it out.
The entire All Blacks apparel line has been updated for 2013/14. Check out the New Zealand All Blacks polo.
The Nike Tiempo is a solid rugby cleat and one of few styles still made from full-grain natural leather.
The Gilbert Blitz 8S rugby cleat is a great cleat at a great price of $69.99. Get a new pair of cleats today.
A cool looking all black rugby cleat with the high performance adidas is known for. Get in the Gear!
Wear the crest of the British and Irish Lions on your t-shirt. A great look for the summer.
$29.99
The All Blacks Performance t-shirt is black with hints of blue from the training jersey. Very Cool.
The New Zealand All Blacks training jersey for 2013/14. Get in the Gear!
The USA Rugby Pro Alternate rugby jersey is perfect for any fan of the Eagles. Get yours to wear during the summer Test matches.
The NEW All Blacks 2013/14 jersey has arrived at World Rugby Shop. Dare to wear the colors of the All Blacks.