The IRFU confirmed the Ireland captain suffered a significant hamstring injury during Sunday's win over France, one that will require surgery this week.
That game in Cardiff has now proved to be O'Connell's 108th, and last, in an Ireland jersey.
Leinster's Mike McCarthy has joined the squad as a replacement.
Former Ireland Manager Eddie O'Sullivan says O'Connell's leadership qualities were evident from the beginning.
Meanwhile, Sean O'Brien will appear before an independent disciplinary hearing in London this lunchtime.
The Leinster flanker was cited for striking French second row Pascal Papé during Sunday's victory in Cardiff.
