Real Madrid have suffered a major blow with the news that Pepe is set to be sidelined for six months.
The defender has suffered a torn anterior cruciate ligament in his right knee and needs surgery.
The 23-year-old suffered the injury in Real's last-gasp 3-2 win over Valencia on Saturday after landing awkwardly following an aerial challenge.
He was stretchered off just prior to half-time and was replaced by Ezequiel Garay at the start of the second period, who went on to net the winner.
A statement on the club's official website on Sunday said: "An MRI at Sanitas La Moraleja Hospital earlier today confirmed that Pepe has torn the anterior cruciate ligament in his right knee.
"The player will undergo surgery in the upcoming days and is expected to be sidelined for six months."
Pepe's injury leaves Madrid with just three recognised centre-backs in Raul Albiol, Garay and Christoph Metzelder, although Sergio Ramos can also play in the middle.
Real Madrid general director Jorge Valdano confirmed the Spanish giants will consider entering the transfer market again in January to find a replacement.
IrreplaceableHowever, he also admitted there was no player available comparable to Pepe, describing the Portugal international as "irreplaceable".
Valdano told the club's official website : "Pepe is an irreplaceable player. There is no other Pepe on the market.
"From tomorrow we will evaluate if we are going to make a signing to make us feel more comfortable and to reinforce the squad, but it is something we will talk about tomorrow because today we are concerned about the fact we have lost the player.
"We are not ruling it (a signing) out, but neither are we sure because we have to look at the market."
The injury is also a big blow for Portugal's World Cup aspirations as Pepe had been used as a defensive midfielder during the qualification campaign.
Having reached next summer's World Cup in South Africa via the play-offs, Carlos Queiroz's side have been drawn in the 'Group of Death' alongside Brazil, Ivory Coast and North Korea.
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