The New Zealand batting mainstay sustained the injury during the season opener against Chennai Super Kings here last Friday.
Williamson sustained the injury to his right knee while attempting a catch during the opening match at the Narendra Modi Stadium.
"It is sad to lose Kane to injury so early in the tournament. We wish him a speedy recovery, with the hope of seeing him in action very soon," said GT's director of cricket, Vikram Solanki, in a press release.
Williamson will now head home to New Zealand for further assessment, the defending champions said in the press release.
Gujarat Titans will finalise a replacement for the right-handed batter and an announcement will be made in due course.
The 32-year-old got injured following a nasty fall while fielding on the boundary during the CSK innings. He had limped off the field in the 13th over.
Williamson, who was making his Gujarat Titans debut, intercepted a ball headed for a possible six off CSK opener Ruturaj Gaikwad's bat.
He managed to palm the ball into the field of play before it bounced onto the boundary ropes. But he fell awkwardly on the ground and clutched his right knee in pain.
He was taken off after receiving on-field treatment and did not come back to bat with B. Sai Sudharsan coming on as a substitute fielder first and later he took Williamson's place in the Titans' playing XI under the Impact Player rule.
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Mumbai (PTI): Ryan Rickelton's whirlwind unbeaten ton was overshadowed by Heinrich Klaasen's unbeaten 65 as Sunrisers Hyderabad defeated Mumbai Indians by six wickets in an IPL match here on Wednesday.
Chasing an imposing 244-run target, Travis Head (76 off 30) and Abhishek Sharma (45 off 24) shared 129 runs for the opening wicket to set the platform for SRH.
Klaasen (65 not out off 30 balls) then displayed his all-round hitting abilities to guide SRH home with the help of Nitish Kumar Reddy (21) and Salil Arora (30 not out off 10) in 18.4 overs.
Earlier, Rickelton's knock powered MI to 243 for five.
MI rode on a 93-run stand between Rickelton (123 not out off 55 balls) and Will Jacks (46 off 22) in 7.1 overs for the opening stand to power the side.
MI skipper Hardik Pandya scored a valuable 31 off 15 balls before being dismissed.
Praful Hinge (2/54), Eshan Malinga (1/29), Sakib Hasan (1/39) and Nitish Kumar Reddy (1/31) were the wicket-takers for SRH.
Brief Scores:
Mumbai Indian: 243 for 5 in 20 overs (Ryan Rickelton 123 not out; Praful Hinge 2/54).
Sunrisers Hyderabad: 249 for 4 in 18.4 overs (Travis Head 76, Heinrich Klaasen 65 not out; AM Ghazanfar 2/51).
