Gray will go on the injured list Friday and right-hander Glenn Otto is expected to be brought up from Triple-A Round Rock to start Friday night against Oakland in the opener of a three-game series. Spencer Howard was slated to start Friday but is being moved to Gray's spot on Sunday.
Gray was injured during his start on Tuesday night against Seattle. Gray came off the injured list to make the start against the Mariners after missing time due to a blister on his right middle finger.
Young said an MRI showed a low-grade sprain of the MCL in Gray's knee.
"The important part for us is to get this right, right now, to give this a chance to heal for the next 10 days and that he's ready to go and strong for the rest of the season," Young said. "It's a long year and he's a big part of our season."
Gray said the injury happened on the first pitch of the game when he stepped off the mound reacting to a fake bunt attempt. He finished five innings against the Mariners but took the loss after giving up four runs, all coming on home runs.
"I didn't feel it the rest of the game. I didn't feel it until I got up the next morning," Gray said.
Gray signed a $56 million, four-year deal with the Rangers in the offseason. He's 0-1 with a 7.00 ERA in two starts this season.
Otto made his major league debut last season with the Rangers, going 0-3 with a 9.26 ERA in six starts. Otto has made two starts this season for Round Rock and has not allowed a run in seven innings pitched.