The surgery will be performed by Dr. Neal ElAttrache of the Kerlan-Jobe Orthopaedic Clinic.
Holland, who was last year's Marino Rivera Award winner as the league's best reliever, said he first started experiencing discomfort in the elbow in August 2014. But after a 10-day rest, Holland came back in September and October and was phenomenal. In the postseason, he appeared in 11 games and had seven saves with a 0.82 ERA.
Holland said he didn't want to get an MRI in the offseason because he didn't want the "burden" of knowing he might have a tear. Holland continued to pitch this season with pain, but he was able to secure 32 saves.
But Holland's velocity continued to dip from the 96-97 mph range to 88-93 in recent weeks, and his command lessened. He blew a save on the last road trip in Detroit, his fifth this year. The decision was made shortly thereafter to shut Holland down for the season. He finished the season with a 3.83 ERA.
Holland, 29, actually consented to an MRI on Aug. 31, and that examination revealed a tear in the elbow ligament. He tried to pitch through the pain.
Wade Davis has taken over as the team's closer.
Holland is scheduled for one more year of arbitration in 2016 and would be eligible to become a free agent in '17. It's possible the Royals could non-tender him and then sign him to a two-year deal, with the second year filled with performance bonuses.
Jeffrey Flanagan is a reporter for MLB.com. Follow him on Twitter at @FlannyMLB. This story was not subject to the approval of Major League Baseball or its clubs.