The Grizzlies announced Tuesday the team's physician Fred Azar and orthopedic surgeon James Andrews have recommended surgery for Gay's partially dislocated shoulder.
Gay has missed the past 14 games since suffering the injury on Feb. 15 against Philadelphia. The Grizzlies are 8-6 in his absence and remain in contention for a playoff spot in the Western Conference.
Memphis is trying to reach the postseason for the first time since the 2005-2006 season. Entering Tuesday's games the Grizzlies were two games ahead of the Houston Rockets for the eighth and final playoff berth in the West.
The 6-foot-8 Gay averaged 19.8 points per game and 6.2 rebounds per game this season. The five-year veteran out of Connecticut has been a reliable scorer late in games for the Grizzlies, hitting several important shots.
Gay, 24, hit a tie-breaking jump shot with less than a second to play in a Jan. 24 victory against Toronto, and his basket over LeBron James gave the Grizzlies a win at home against the Miami Heat on Nov. 20.
Gay signed a five-year, $82 million contract this past offseason.
The team said surgery has always been a possibility in the event that rehabilitation was unsuccessful. The date of the surgery has not been set.
Gay is expected to be ready for the start of next season.
The Grizzlies play at Boston on Wednesday.
Information from The Associated Press was used in this report.