The team says it told Dunleavy on Friday to get other medical options, after which a treatment decision will be made.
Dunleavy missed the first 34 games of the season because of problems with the knee. He then averaged 15.1 points as he played 18 games but has missed four games since Feb. 8.
The Pacers also are without All-Star forward Danny Granger, who might miss up to three weeks with a partial tendon tear in the sole of his right foot.
The Pacers play Friday night at Minnesota.