Morgan, capped 25 times, broke a bone in his left foot after tripping on his shoelace and standing on his lose trainer during indoor training with the Celtic Warriors yesterday.
The loss of their first choice full-back is a significant blow for Wales ahead of their first championship game against Scotland on Valentine's Day.
But it is yet another major set-back for the injury-prone flyer who was ruled out of the games against New Zealand and England in the World Cup after damaging his Achilles.
Morgan had already sat out six months of last year after rupturing cruciate ligaments in his right knee having missed the 1999 World Cup with a similar injury in his left.
'Obviously it is a big blow to lose a player of Kevin's quality but everyone is devastated for him after everything that has happened over the last 18 months,' said Wales coach Steve Hansen.
'He has been through so much that to suffer another injury at this time is a terrible blow.
'But he has been through worse and broken bones heal and the more positive he is, the sooner that will happen.'
Morgan had been named in a 47-man preliminary Wales training squad for the Six Nations but his absence will raise the prospect of Gareth Thomas retaining the number 15 jersey that he wore with success against England and the All Blacks Down Under.
However Hansen may be convinced to include young Gavin Henson who returns from a broken hand to play at full-back for the Neath-Swansea Ospreys against Toulouse this weekend.
The initial squad includes Peter Sidoli, brother of Wales lock Robert, as well as Harlequins prop Ceri Jones and Gloucester's rising teenage star James Merriman.
However there is no place for British Lion Dafydd James, former internationals Ian Gough, Ben Evans or Andy Marinos or Llanelli Scarlets captain Vernon Cooper.
Wales training squad: Dwayne Peel, Iestyn Thomas, Michael Phillips, Robin McBryde, Stephen Jones, Dafydd Jones, Mark Taylor, Chris Wyatt, Mark Jones, Garan Evans, Matthew Watkins, Barry Davies (Llanelli Scarlets); Gareth Cooper, Mefin Davies, Ceri Sweeney, Gethin Jenkins, Sonny Parker, Robert Sidoli, Kevin Morgan, Brent Cockbain, Gareth Thomas (Celtic Warriors); Huw Bennett, Gavin Henson, Adam Jones, Shane Williams, Duncan Jones, Gareth Llewellyn, Jonathan Thomas, Richie Pugh, Gavin Thomas (Neath-Swansea Ospreys); Iestyn Harris, Gareth Williams, Jamie Robinson, John Yapp, Tom Shanklin, Martyn Williams, Rhys Williams, Ryan Powell, Craig Morgan (Cardiff Blues); Hal Luscombe, Michael Owen, Nathan Brew, Peter Sidoli (The Dragons); Alix Popham (Leeds); Ceri Jones (Harlequins); Colin Charvis (Tarbes); James Merriman (Gloucester).