Wall, 28, is expected to be sidelined six to eight months before returning to full basketball activity, the team said.
Doctors determined the procedure is necessary for Wall to remedy an issue that has bothered him for more than a year. Wall on Saturday met with specialist Dr. Robert Anderson, who recommended the surgery.
Wall was trying to play through the injury, but it was getting worse, sources told ESPN, and opting to have the surgery now should allow him to return healthy for the start of next season.
"I've been with him for almost three years,'' coach Scott Brooks said of Wall. "He's as tough as they come. He never complained. He wanted to compete for his team, but it got to a point where he had to make some tough decisions. And that's why he met with a specialist."
Wall, who is averaging 20.7 points and 8.7 assists per game, has been able to manage the pain and looked like his All-Star self in some games this season. On Dec. 16 in Los Angeles, he scored 40 points with 14 assists against the Lakers.
But other times, the pain and swelling made it hard to move, such as on Dec. 8, when the Cavaliers held him to one point. He then missed Washington's next game two days later in Indiana.
The Wizards improved to 14-24 with Saturday's win, breaking a three-game losing streak. Washington had lost five of six entering the game. Tomas Satoransky started in Wall's place for the second straight night and had 20 points and six assists against the Hornets.