Wagner, a 37-year-old left-hander, will have surgery later this week.
He is owed $10.5 million next year, the final guaranteed season in $43 million, four-year contract with the Mets. The team has an $8 million option for 2010 with a $1 million buyout.
New York began Monday with a two-game lead over Philadelphia in the NL East. The Mets are 22-11 in Wagner's absence.
Wearing a protective sleeve on his left elbow, Wagner tested his arm Sunday with disappointing results. Between games of a day-night doubleheader against the Phillies, he went to the mound in a virtually empty Shea Stadium and faced teammate Gustavo Molina.
A wild Wagner hit the reserve catcher on the left foot with his 13th pitch and walked off the field to consult with a trainer and the Mets' coaching staff.
"It's bittersweet," manager Jerry Manuel said Sunday. "Bitter in the sense that we lost Billy Wagner probably for the remainder of the year."
Wagner was 0-1 with a 2.30 ERA and 27 saves in 34 chances, and he is sixth on the career saves list with 385.
"He was trying to get us to activate him today," Mets general manager Omar Minaya said Sunday. "The last pitch he threw, he really felt some discomfort in the elbow area. He didn't want to risk it."
Luis Ayala, acquired from Washington last month in a trade, is 5-for-6 in save opportunities for the Mets.
Ayala allowed an unearned run in the ninth Sunday night. Before that, Mets relievers had not allowed a run in 23 innings since Aug.
31.
Still, Wagner's loss is a huge one for a bullpen that has been unreliable much of the year. Manuel has mixed and matched as much as possible with his relievers during the past month.
"Anytime you have a guy such as him and you lose him, it becomes a big challenge," Manuel said. "I think they have matured somewhat down there very well. We have some candidates down there to get outs. We just have to continue matching them up."
