The 20-year-old has sustained what British Gymnastics described as a "significant lateral ankle ligament injury" and will undergo further tests next week.
The extent of the injury means Wilson is now likely to miss both the British Championships in March and the European Championships in Cluj, Romania in April.
It could hardly have come at a worse time for Wilson who was hoping to continue building on his stunning performance in the high bar final in Rio last summer.
The busy 2017 programme also includes the World Cup of Gymnastics at London's O2 Arena in April as well as the World Championships in Montreal in September.
British Gymnastics men's head national coach Eddie Van Hoof said: "This is obviously a significant setback for Nile at this early point in the Tokyo cycle.
"He will receive the best possible advice and support to assist in his recovery. Nile will now focus on the recovery period and we will adjust his programme accordingly."
Wilson sustained the injury during the dismount from a parallel bars routine at his club in Leeds on Wednesday.
In a message posted on his official Twitter account he wrote: "Following a freak accident on Wednesday a scan of my ankle has revealed a serious injury.
"I am committed to getting back to full fitness as soon as I can! The power of my goals are always bigger than the obstacles I face & I will come back a better gymnast and a better person".