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The Norway international was left out of Dortmund's squad for Thursday's (AEDT) 1-1 Champions League draw with Lazio as a result of the injury he sustained in training.
He has featured 14 times for Dortmund in all competitions this term, starting 13 of those games and scoring 17 times.
However, BVB will now have to make do without the 20-year-old for the remainder of 2020 in a major blow for Favre.
"He won't play before the beginning of January. He may have played too much," Favre told Sky Germany. "At first we thought it wouldn't be that bad. But he can't play now."
Dortmund sits four points behind Bundesliga leader Bayern Munich and face Eintracht Frankfurt, Stuttgart, Werder Bremen and Union Berlin before the end of the year.
It also has a trip to Eintracht Braunschweig in the DFB-Pokal second round and a Champions League meeting with Zenit next week in what is a hectic month.
Haaland, who netted 16 goals in just 18 appearances for the club last season, will hope to be back for Dortmund's trip to high-flying RB Leipzig on January 9, which comes six days after they host Wolfsburg to begin 2021.
Since Haaland's debut, Dortmund has been without the star for just three Bundesliga matches – but it has won all of them while scoring nine goals. With Haaland, Dortmund has recorded 16 wins and seven losses since his debut in January.
