The 6-foot-10, 265-pound sophomore, who was dominant in March in the Wolverines' run to the national title game, has been plagued with back issues since the preseason. He sat out the first two games of the season and is averaging 9.5 points and 8.3 rebounds in eight contests this season.
"My back problems have been a daily challenge ever since late August," McGary said in a statement released by the school Friday. "We have worked hard rehabbing the injury, and I thought that everything was proceeding in the right direction until the last two weeks."
"I have consulted with my family, my coaches and our doctors and decided the best option now is to have surgery," he added.
Michigan said there is no timetable for his return, but sources told ESPN.com it's highly unlikely he'll return this season. The Wolverines are off to a disappointing 7-4 start after preseason expectations to be contenders for the Final Four again despite the loss of Player of the Year Trey Burke.
McGary would have been a first-round pick, possibly even a lottery selection, in the 2013 draft after averaging 14.3 points and 10.7 boards in six NCAA tournament games.
But he decided to return for his sophomore season, and now NBA executives have become concerned with the recent back issues that kept him out and hampered his effectiveness when he was on the court.
"He should have left," one NBA general manager told ESPN.com. "Now he's a borderline first-rounder. He would have been a lock last season."