The midfielder twisted awkwardly attempting a tackle in Uruguay's defeat to Spain in Guadalajara on Friday and had to be carried off on a stretcher. He was assessed by Uruguay's medical staff on Saturday before travelling to Manchester for further tests, with United officials to determine the best course of treatment.
Manchester United confirmed the injury in an official statement.
"Manchester United can confirm that Manuel Ugarte has suffered a knee ligament injury whilst representing Uruguay in Friday's World Cup group-stage match against Spain," the club said. "Assessment of the injury is ongoing to determine the best course of treatment and the rehabilitation timescale.
"Everyone wishes Manuel a successful recovery and we will be supporting him every step of the way."
Ugarte broke his silence on Sunday with a message on Instagram that indicated the severity of what he had suffered.
"Suffering the most serious injury a footballer can face in one of the most important matches in my country's history, and seeing it end this way without being able to stay on the pitch and support my team-mates until the final whistle, is something that will stay with me for the rest of my life," he wrote.
He also expressed his determination to return.
"Hitting rock bottom will make me stronger in every sense, and I truly believe that's the case here," Ugarte said. "Without a doubt, when life wants you to stop, it finds a way to let you know. It's up to me to take the positives from this. Success in life is about starting again every time you fall."
Ugarte joined United from Paris Saint-Germain in 2024 for £50.8m but has not established himself as a regular starter. His last appearance came in the home Premier League defeat by Leeds United on April 13. He had been expected to move on this summer, either permanently or on loan, with United prioritising a midfield overhaul. Those plans are now on hold pending the results of his tests in Manchester.