The news had been expected after Ballard sat out yesterday's 2-1 win over rivals Newcastle United at St James' Park with the injury he suffered in last week’s defeat at the hands of Brighton.
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Ballard's absence is another major blow for Northern Ireland boss Michael O’Neill, who is already without Liverpool’s Conor Bradley for Thursday’s match in Bergamo.
The winner of that tie will then face either Wales or Bosnia-Herzegovina for a place at this summer’s World Cup in the United States, Canada and Mexico.
O’Neill has replaced Ballard in his 28-man squad with 19-year-old defender Tom Atcheson, who the manager has been working with directly since taking the Blackburn job alongside his international duties last month.
It is a first senior call-up for Atcheson, who has played at several youth levels up to the under-21s for Northern Ireland.
This season he has made eight first-team appearances for Rovers, starting their goalless draw with Middlesbrough on Saturday.
O’Neill’s squad met up in Liverpool last night and will spent the week training in the city before flying to Bergamo on Wednesday afternoon.