Powell-Pepper left the field during the third quarter of Port's 11.16 (82) to 10.12 (72) win over St Kilda at Adelaide Oval on Friday night.
The club confirmed the injury on Saturday, saying he would miss the remainder of the year and undergo surgery to repair his knee ligament in coming days.
Powell-Pepper after going down with what Hinkley called a "nasty" injury. (Matt Turner/AAP PHOTOS)
"We are incredibly disappointed for Sam," Port Adelaide's head of medical services Tim O'Leary said.
"Sam is a dedicated and diligent athlete who attacks his training with unrelenting intensity and will no doubt approach his rehab the same way.
"He will continue to be as involved as he can, as a leader and important member of our playing group.
"It's such a tough injury for a footballer to go through. We're all behind him and we know he'll come out the other side stronger and more determined."
Powell-Pepper was only playing his third game since serving a four-match suspension for a high bump during a pre-season hitout.
In a further blow, Port Adelaide captain Connor Rozee faces a battle to be fit for Thursday's Showdown after the club confirmed he suffered a low-grade hamstring strain.
The 24-year-old will be assessed during the week.
The Power will be without Aliir Aliir for the clash against the Crows at Adelaide Oval after the key defender was concussed against St Kilda.
Aliir has been placed into concussion protocols after a tackle by St Kilda small forward Jack Higgins in the second term.
Higgins faces a nervous wait to learn if he will be cited by the match review officer for a dangerous tackle.
St Kilda coach Ross Lyon said he had not seen the incident.
"There's great processes and structures within the AFL and the game so everything gets taken care of in the end," Lyon said.
Port Adelaide coach Ken Hinkley said he feared worst when Powell-Pepper went down.
"When you hurt your knee, and can't go back on, my history in the game and the amount of times I've seen those sort of things happen, it lends itself towards possibly being an ACL," Hinkley said post-match.
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