Mallett started in the Texans' past two outings, including in Sunday's 22-13 loss to the Cincinnati Bengals - despite reportedly tearing his right pectoral muscle in the warm-up.
The 26-year-old, elevated to be Houston's starter in favour of Ryan Fitzpatrick, played through the pain, but scans have revealed he will sit out the remainder of the campaign.
The news comes as a blessing for Fitzpatrick, who will regain his number one spot for the Texans' hosting of American Football Conference South rivals the Tennessee Titans.
Fitzpatrick played in Houston's first nine games of the season, throwing 11 touchdown passes and being intercepted eight times.
Houston (5-6) are virtually battling with the Indianapolis Colts (7-4) for the divisional title, with the Titans (2-9) and Jacksonville Jaguars (1-10) well back.
It is a vital part of the Texans' season, as they face each of their AFC South counterparts in the next three weeks.