The 24-year-old was taken ill on Friday and sat out the 0-0 draw with Fulham on Saturday.
Trotters boss Owen Coyle said: "Gary suffered a pain in his arm and it became severely swollen on the day of the game.
"There was no way he could play so we took him straight off to hospital. It turns out he had a blood clot in his arm, so he is going to be out for a number of months."
Cahill is due to be released from hospital on Monday after being kept in since Saturday.
Coyle said: "It is a severe blow for the boy but our main concern is his welfare. We have to make sure Gary is fit and well.
"He will miss the next few months, it might be for the rest of the season, we will hear from the specialist later.
"The clot needed to be resolved and in doing that you need the medication. It follows you can't play.
"As disappointed as we are, at 24, Gary has a marvellous career ahead of him. I believe he would have made the World Cup for the summer but we have to make sure first of all he recovers from this blood clot."
Coyle has promised that the level of care afforded to Cahill will be second to none.
"I don't think it is a sport-related injury, I think it is just one of those things that can happen to anyone at any given time, " said the Bolton boss.
"Gary will be disappointed as he has so much to play for. He is one of the best players at the club and he had a big role to play, no doubt about that.
"He also had a chance of going to the World Cup - but that chance will come again. He is a terrific lad and someone we love working with. He has a great mindset.
"Gary will get the best care available to him. As much as we love football, we will focus on making sure Gary recovers well."
Barclays Premier League Relegation 2009/2010 Win Outright: Bolton 3/1