The 22-year-old AC Milan striker, who has two goals to his name at the tournament of continental champions in Brazil, had been expected to lead Italy's attack against Spain in Fortaleza on Thursday.
"The examinations carried out this afternoon (Sunday) in Fortaleza on Mario Balotelli showed a grade-one tear in the quadriceps muscle of the left leg," the FIGC said in a statement.
"The player will not be available for the semi-final against Spain on Thursday, June 27 and in the coming days his condition will be evaluated for the match on the 30th (either the final or third-place play-off)."
Earlier, the FIGC had confirmed right-back Ignazio Abate's withdrawal from the tournament due to a dislocated shoulder and said midfielder Riccardo Montolivo was due to undergo tests on a head injury.
Abate hurt his shoulder during Italy's 4-2 loss to Brazil on Saturday and team doctor Enrico Castellacci said he would return to Italy immediately "given the impossibility of him continuing in the competition".
Castellacci said that an initial brain scan on Montolivo had revealed nothing, after the Milan midfielder was also forced off during the Brazil game.
"The boy is doing better and his condition will also be medically evaluated," Castellacci said.
Manager Cesare Prandelli said he hoped to have Andrea Pirlo fit for the semi-final after the Juventus midfielder sat out the Brazil game with a calf complaint.