The 24-year-old picked up the injury during last weekend's training camp matches in Johannesburg and scans in Cape Town on Monday revealed the extent of the injury.
Springbok Sevens coach Neil Powell has narrowed his provisional squad down to 17 players, to be announced by the South African Sports Confederation and Olympic Committee (SASCOC) on Thursday, 24 June.
However, the Blitzbok coach confirmed that Ndhlovu's name will not be amongst the selected ones, and expressed his disappointment after hearing the news.
“I really feel for Mfundo,” said Powell.
“He has been excellent during these matches in Johannesburg. I have asked the players before this final preparation block to make it impossible for me not to select them to go to Tokyo and it is fair to say that Mfundo responded to that challenge.”
Powell indicated that the final decision on which 12 players (plus two reserves) will board the plane to Japan will be made closer to departure.
“We still have some time left to finalise the squad, and injuries are part of the package, so I would rather make that final call a bit later,” Powell said.
"I have to compliment the guys, they really made it tough for me.”
Ndhlovu expressed severe disappointment: “I feel like I have let a lot of people down, but injuries do happen, although it does not take the disappointment away. I will be back.”