The Cats confirmed the injury on Saturday afternoon, with the club's football manager Neil Balme calling the news "tremendously disappointing for Nathan and the team".
"As is often the case, the injury happened in an innocuous situation at training," Balme said.
"Nathan and our medical team will consult with specialists ahead of surgery to repair his knee. At this stage, we do not have a timetable on surgery."
Vardy was said to be having a good pre-season as he sought to continue his form that brought him back into the Geelong side for the late stages of last season.
The luckless Vardy is expected to miss the entire 2014 season with the injury, leaving Geelong light on in their big man department.
With Trent West having departed for Brisbane, the Cats only have Mark Blicavs (22 games), the untried Dawson Simpson and Hamish McIntosh as ruckmen.
McIntosh, who played 107 games for North Melbourne, has yet to debut for Geelong since being traded in 2012.
Vardy has 21 games for Geelong since debuting in 2011.