Giles picked up the injury in the second half of Friday's 28-14 PRO14 derby win over Scarlets and had to be stretchered off.
Giles has been assessed and it has been decided he will need a significant operation, meaning the 20-year-old is likely to be out for a lengthy period.
Chris Towers, Medical Performance Manager at the Ospreys, confirmed the operation on the region's website.
He said: "Keelan has sustained a significant knee ligament injury and will require reconstructive surgery.
"We are currently in the process of seeking expert opinion to formulate the best course of management going forward and will provide appropriate updates when necessary."
Giles has come through the ranks with Ospreys and has gradually forced his way into the first team on a regular basis over the past 12 months, while he also has represented Wales at Under-20 level and been included in the senior squad without yet making his debut.