Parsons aggravated his knee injury in Game 1 of his team's first-round playoff series against the Houston Rockets and will now require surgery.
Parsons revealed that he damaged cartilage in his knee when he landed after a dunk in transition in the second quarter.
Despite initially injuring his knee on March 29 in a loss to the Indiana Pacers, Parsons admitted that he rushed his recovery in order to play against his former team.
"If it was anybody but Houston, I honestly probably wouldn't have played in Game 1," Parsons told ESPN. "It just sucks. I've never been hurt and I want to play and I can't.
"It never got better. It's just so frustrating right now because obviously I want to be playing with my team. I want to be out there. The playoffs are the most fun time of the year and I was obviously looking forward to this series against Houston.
"And it's all taken away from me. It's devastating and I want to be out there. I've tried everything. I've tried every possible thing to try and play. Rehab and rest, different treatments, and nothing's worked."
Parsons also admitted that he didn't think the injury would become this bad since he missed the last six games of the regular season and even started taking pain-killing injections two days before the playoffs began.
"It's the playoffs, man," he said. "You've got to be really, really hurt to not play in a playoff game, in my eyes. I thought with everything I had done to prepare myself, I could get through it. It didn't work out. Didn't feel well. Didn't play well. But it was a risk I had to take."
Parsons will now visit a specialist in Chicago next week to get a third opinion on the operation he requires. The 26-year-old has visited Mavericks team doctor T.O. Souryal on numerous occasions and even spoke to Walter Lowe, who is the Rockets' team doctor.
"Trying to stay positive with it," Parsons said. "Whatever the operation is, I'm going to have to be very disciplined and I'll get stronger than ever."