Holland, 27, sustained the injury during a fall at his home on Tuesday. He is expected to be out until midseason.
"I am devastated by this injury," Holland said in a statement released by the team. "It was a freak accident at home, resulting in a hard fall on my knee. As upsetting as it is, my goal is to begin rehab and get back on the mound as soon as possible."
Although no major deals have recently taken place, there are sure to be plenty of fireworks before teams report to Spring Training.
MLB.com's Richard Justice gives insight on a few of the bigger offseason questions still remaining.
Other news and notes from Friday:
• The Yankees designated outfielder Vernon Wells for assignment. New York also officially announced its two-year deal with left-handed reliever Matt Thornton.
• Right-hander Jeff Niemann and outfielder Sam Fuld are both open to returning to Tampa Bay, as MLB.com's Bill Chastain writes in this notebook.
• Designated hitter remains a concern for the Orioles, who also signed infielder Alexi Casilla to a Minor League deal with an invitation to Spring Training.
• The Royals agreed to a one-year deal with catcher Brett Hayes to avoid arbitration.
• Twins prospect Byron Buxton might be the game's No. 1 prospect, according to MLB.com, but he knows he's not ready for the bigs.
• White Sox prospect Carlos Sanchez is impressing in the Venezuelan League.
• The Mariners appear to be staying in house as they search for their next club president.
• The Rangers are keeping close tabs on the Masahiro Tanaka situation.
• The Angels are focused on improving their farm system.
• Top pitching prospects Noah Syndergaard and Rafael Montero are among 20 non-roster players the Mets have invited to Spring Training.
• The Nationals signed outfielder Joseph Dunigan to a Minor League contract.
• MLB.com's Todd Zolecki fields Phillies fans' questions in his inbox.
• Two Phillies prospects -- left-hander Adam Morgan and right-hander Shane Watson -- are likely out until August because of injuries to their throwing shoulder.
• Marlins manager Mike Redmond reminisces about his battles with new Hall of Famer Greg Maddux.
• The Reds are keeping an eye on the utility infield market -- specifically someone capable of backing up shortstop Zack Cozart.
• The Cardinals are focused on their upcoming arbitration cases with outfielders Jon Jay and Peter Bourjos and infielder Daniel Descalso.
• The Giants signed left-hander Dontrelle Willis to a Minor League deal.
• The Dodgers aren't expected to make a big push for Tanaka.
• Giants prospect Angel Villalona has impressive pop.