Manuputty suffered the injury and was forced to retire when she landed awkwardly during her Sudirman Cup semi-final match against world number one Li Xuerui last week.
With Manuputty set to be out of action for approximately three weeks, Hanna Ramadhini will replace her in the women's singles event.
Manuputty's injury is a major blow for Indonesia as she won a gold medal in the women's singles event at the 2013 South East Asian Games in Myanmar.
"We have excluded Bella from the SEA Games due to her knee injury, Hanna has been named as her replacement in the individual event," Mimi Irawan, the game coordinator of the Indonesian team, told reporters. "We will officially add Hanna to the individual event during the Delegation Registration Meeting that will be held in Singapore on May 21."