The 2009 NL Rookie of the Year said recovery time following surgery is four to eight weeks, meaning he might be able to play the final couple of weeks of the regular season in a best-case scenario.
Coghlan had hoped to delay surgery until after the season and return soon, but he decided the knee isn't getting any better.
"I went out there and threw three days ago, and I think that's when it really hit me that, `OK, I'm not going to be able to do this,"' he said Sunday. "I had too much sharp pain in my knee."
Coghlan hurt himself July 25 delivering a celebratory pie to the face of teammate Wes Helms after a walkoff win over Atlanta.
"It matters more to the public how you get injured, especially with the circumstances of how it happened to me," Coghlan said. "But to me the bottom line is I was injured, and it's disappointing. It's tough watching your team going out there and compete, and you're not able to help."
Coghlan is hitting .268 with five home runs and 28 RBI in 91 games. Last year he hit .321 with nine homers and 47 RBIs.
"I will do everything in my power to get back healthy as quick as I can," he said.
"Right now I haven't even focused on that -- too much focus on my knee," he said. "Let me get surgery and let me get back. Obviously as that process goes on, I'll be thinking more about third base."
Coghlan played mostly second base in the minor leagues.